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Gold Advances From Two-Month Low in London on Weaker Dollar

July 9, 2009 at 13:39 by Andriy Moraru

Gold rose from a two-month low in London as the dollar weakened for the first time in six days, increasing the metal’s appeal as an alternative investment.

The U.S. Dollar Index, a six-currency measure of the greenback’s value, declined as much as 0.8 percent today. Gold, which typically moves inversely to the currency, dropped as low as $905.10 an ounce yesterday, the lowest since May 6.

Gold “has traded higher this morning on a softer dollar,” James Moore, an analyst at TheBullionDesk.com in London, said in a note today. “While gold is at risk to further pressure short- term, we expect the metal to find more substantial support below $900 an ounce.”

Bullion for immediate delivery gained $5.71, or 0.6 percent, to $915.21 an ounce by 11:16 a.m. in London. The metal yesterday fell the most in a month. August gold futures rose 0.6 percent to $914.90 an ounce on the New York Mercantile Exchange’s Comex division.

The metal slipped to $914.75 in the morning “fixing” in London, used by some mining companies to sell production, from $918 at yesterday’s afternoon fixing. Spot prices are heading for a fifth weekly decline in six.

From Bloomberg News.

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