GOLD EASED THURSDAY BY 02 PERCENT

Updated: 07/16/2009 15:48
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Thursday morning bullion prices weakened slightly as the dollars rise prompted profit-taking on bullions jump to a two-week high the previous day

Thursday morning bullion prices weakened slightly as the dollar's rise prompted profit-taking on bullion's jump to a two-week high the previous day when US consumer price data stoked concerns about rising inflation.

Economic recovery hopes impacted stocks to move higher, bolstering investors to take more risks and weighing on the US currency, while inflation worries returned after the US price data came in stronger than expected. Gold investors continued to take cues from the dollar, as a rise in the currency cuts bullion's appeal as an alternative to dollar and assets, but emerging inflation concerns are helping to improve gold's technical charts.

Spot gold lost 0.2%, sliding to $936.40 per ounce as of 3:03 GMT, against New York's notional close of $938.45 on Wednesday, when it rose to near $942 level.

The break of the 20-day moving average around $927-$930 paves the way for the market to test $950, a level it failed to sustain when players tried to establish a floor after prices had been steadily falling from near $990 in early June, experts consider.

US gold futures for August delivery fell 0.3% to $936.70, from $939.40 an ounce on the COMEX division of the New York Mercantile Exchange. The August contract rose to $942.30 on Wednesday, its highest level since July 1.

The SPDR Gold Trust reported its holdings to be unchanged at 1,094.54 tonnes as of July 15, after falling 1.4% the day before, its largest drop in three months.

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