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Gold Rallies After Worst Quarter in Century, Silver Follows

July 2, 2013 at 1:46 by Vladimir Vyun

Gold rallied today as low prices spurred physical demand, the trend that has started last week. Silver also gained. US policy makers were speaking last week in an attempt to soothe the shock for markets created by the comments about a possible reduction of stimulus by the Federal Reserve. It looks like trimming of quantitative easing is not going to happen soon and this gave metals some breather.

Prices for gold has slumped 23 percent in the second quarter of this year. It was the biggest quarterly drop in almost a century. There are concerns about profitability of mining operations as falling prices were squeezing margins, while production costs were increasing. Soon it may become completely unprofitable to get gold out of the ground.

August futures for delivery of gold rose $1.3 (0.1 percent) to $1,257 per troy ounce as of 1:42 GMT on COMEX today. September contract for silver added $0.15 (0.75 percent) to $19.73 per ounce.

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