05/07/07: Gold price lifts as dollar declines

Gold prices lifted by around $2 an ounce today (Thursday, July 5th) as the dollar weakened and oil prices increased, Reuters reports.

Bullion was at $656.20 an ounce just after midday, up from $654.40 late on Wednesday night.

Dresdner Kleinwort analyst David Holmes commented: "The key thing is that the dollar is very weak and the oil market is very strong … There is some reluctance to buy at the $659 level and equally nobody wants to go out and attack on the downside because there are favorable things in the background."

Frank McGhee of Integrated Brokerage Services LLC in Chicago told Bloomberg: "It's been all about the dollar. If the euro continues to strengthen, that will favor gold."

Gold futures for delivery in August increased by 0.3 per cent to $657.50 per ounce on the New York Comex.

The market largely ignored announcements by European and UK central banks regarding interest rates.

The price of gold often moves in the opposite direction to the dollar.