29/06/07: Gold rallies on weaker dollar and stronger oil

Gold and silver both rose today (June 29) in New York following the dollar's slide against the euro, Bloomberg reports.

The dollar suffered its biggest drop against the euro in a week, prompting investors to bank on the security offered by precious metals.

Gold futures for August delivery rose by 0.3 per cent to $652.20 an ounce at 9am this morning on the New York Mercantile Exchange's Comex division. Silver futures for September delivery dipped by 0.6 per cent to $12.58 per ounce.

"The currencies are keeping gold afloat," said Marty McNeilll of stock brokerage RF Lafferty. "You can get a minor rally off the weaker dollar."

Other factors helping gold to rally included firmer oil prices, according to Reuters.

"The precious metals markets bounced on a combination of easing in credit market concerns, which encouraged bullion buying and a rally in oil and other commodities," HSBC said.