By Frank Tang and Jan Harvey
NEW YORK/LONDON (Reuters) - Gold ended higher on Monday as U.S. dollar weakness prompted broad gains in commodities, but platinum finished lower after hitting an 11-month low during Asian trading.
Traders said gold was forming a new base that could result in more gains.
Gold was at $810.70/811.90 by New York’s last trade at 2:15 p.m. EDT (1815 GMT), up from $799.65/801.05 its U.S. market close on Monday. The precious metal started the session lower, slumping to a session low of $782.05.
The dollar weakened across the board as U.S. stocks dropped and investors took profits on the greenback’s recent steep gains. The dollar’s slump triggered a broad-based rally in commodities and crude oil.
Strengthening oil prices also made gold more attractive as a hedge against inflation. U.S. crude futures ended $1.66 higher at $114.53 a barrel.
Carlos Sanchez, precious metals analyst at CPM Group in New York, said the gold market was trying to build a base between $780 and $800, and could move in a range in the near term.
In the morning, the U.S. government said the Producer Price Index, a gauge of wholesale prices, shot up in July at the fastest year-on-year rate since 1981.
After the report, bullion was pressured as the dollar strengthened on hopes that the U.S. Federal Reserve would raise interest rates. But lingering inflation fears can boost gold. Continued…
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