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Copper Gains, Gold Hits New Record on Weaker Dollar

October 13, 2010 at 21:28 by Vladimir Vyun

Copper gained today as stockpiles shrank and the dollar declined, increasing appeal of commodities as an alternative asset. The dollar slipped 0.5 percent versus the basket of six major currencies today after the Federal Reserve signaled yesterday it would stimulate the US economy. LME-monitored copper inventories declined as much as 33 percent since March 1st to the lowest level in almost a year. December futures for copper delivery slid $0.031 (0.8 percent) to $3.8205 per pound as of 13:23 on COMEX.

Gold rose to the record for the 15th time in the past month as a weaker dollar increased investors’ demand for the precious metal. Gold proves its new role (or rather returned to its old role) as a currency, while conventional currencies weakens. An intention of the Federal Reserve to increase the Treasury purchase simply drives down the dollar and boosts gold. December futures for gold delivery rose $23.80 (1.8 percent) to $1,370.50 per ounce by 13:55 on COMEX. The previous record was $1,366.

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