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Gold Futures Rebound After Dollar Rally

Posted on: Tuesday, 25 July 2006, 18:01 CDT

NEW YORK - Gold futures settled higher Tuesday at the New York Mercantile Exchange after recovering from a drop-off in price initiated by a rally in the dollar.

Most active August gold settled up $4.80 at $618 a troy ounce. During the session the contract was steady, but a rally in the dollar sent the contract to a $610 an ounce session low.

The dollar rallied on the heels of better-than-expected U.S. economic data as June existing home sales and July consumer confidence came in above market expectations.

The consumer confidence figure rose in July to 106.5 versus 104 anticipated by the market.

"The number is accompanied by a cautious optimism about the job prospects and traditionally is seen as an estimate of U.S. consumer spending, which accounts for about two-thirds of the overall economic activity," said analysts at MKS Finance in Geneva in commentary released Tuesday.

The existing home sales figure was also higher than anticipated, even if the figure still represents a fall in June compared with the upwardly revised 6.71 million units in May.

September silver settled at $10.945 an ounce, up 2.5 cents.

October platinum settled at $1,229.50 an ounce, up $20.20, and September palladium settled up 95 cents at $317 an ounce.

The combination of technically inspired short covering and supply concerns in Chile sent high-grade copper futures higher.

The most-active September copper contract rose 7.90 cents to settle at $3.4610 per pound.

At the session high of $3.4750, September copper had bounced 26.50 cents - or roughly 8 percent - since Monday's low of $3.2100 a pound.

Crude-oil futures fell by 1.7 percent Tuesday on low trading volume amid a visit to the region by Secretary of State Condoleeza Rice and reports the U.S. is pushing for the introduction of international forces in southern Lebanon.

The front-month September crude contract fell $1.30 to $73.75 a barrel, its biggest fall since July 18.

August gasoline fell 2.93 cents to $2.2849 a gallon. August heating oil fell 2.6 cents to $1.9439 a gallon.

Traders said the ongoing fighting in the Middle East, which has lasted two weeks without showing signs of drawing in major oil supplier Iran, led some speculators to close bets on higher prices they had made during the conflict.

August natural gas fell 19.6 cents to settle at $6.409 a million British thermal units.

On the New York Board of Trade, Arabica coffee futures advanced off 21-month lows as speculators and locals covered shorts and bought. September ended 1.05 cents higher at 95.10 cents a pound and December gained 1.05 cents to 99.15.

September cocoa settled up $1 at $1,484 per metric ton.

Futures on raw sugar in foreign ports for October settled down 0.27 cent at 15.31 cents a pound and March lost 0.25 cent to 15.70 cents.

On the Chicago Board of Trade, September corn futures closed 0.50 cents higher at $2.3950 per bushel. August soybeans ended 2-cent higher at $5.8525 a bushel. September wheat fell 7.25 cents to $3.9325 a bushel.

Source: Associated Press/AP Online

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