GOLD REVERSED ITS MONDAY DOWNTREND DIRECTION

Updated: 08/26/2009 23:12
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Tuesday bullion drifted higher after wakening Monday on the strength of the US currency, with investors keeping a close eye on currency markets for gold's near-term direction.

Spot gold inched up by 0.3% reaching $944.60 an ounce at about 5:31 GMT, compared to New York's notional close of $941.40. Friday, bullion hit a one-week high of $957.65 has since hovered below that level.

The greenback has been the main driver for gold over the recent weeks: a stronger dollar typically hurts the precious metal, as it makes dollar-priced gold more expensive for non-dollar holders and dulls gold’s appeal as an alternative asset. On the other hand, a weaker buck boosts precious metal if investors are selling the dollar to buy other assets including gold. Gold can also get benefits from its status as a hedge against risk in case dollar selling is due to US-related concerns

US gold futures for December delivery GCZ9 grew by 0.3% to $946.10 an ounce, compared to $943.70 an ounce on the COMEX division of the New York Mercantile Exchange.

The SPDR Gold Trust (GLD) reported its holdings to flat at 1,066.41 tonnes as of August, 24 as no new investment were made, mirroring a lack of market direction. Friday the SPDR holdings rose for the first time since mid-July for their biggest one-day gain since June 1.

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