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Gold Prices 'to benefit from weaker dollar and stronger oil'

Richcomm Global Services analyst Pradeep Unni claimed today (July 15th) that Gold Prices look set to benefit from a weaker dollar and stronger oil prices, Bloomberg reports.

Historically, the yellow metal tends to move in the opposite direction to the greenback, while it has also shown signs of following a similar path to the price of crude in the recent past.

The US, which is the world's largest energy consumer, confirmed last week that its gasoline inventories fell by 69,000 barrels, a move which has prompted oil prices to head upwards.

Mr. Unni told the news provider: "Gold is steadily ticking higher and recent dollar weakness and the gain in oil prices are favoring the move."

Meanwhile, David Einhorn, who runs the $5 billion Greenlight Capital Inc hedge fund, revealed in an interview with Bloomberg that he switched all its SPDR Gold Trust holdings to Gold Bullion in the second quarter of 2009.

Mr. Einhorn, who bought the yellow metal for the first time in January, explained that the move was motivated by the fact that it is cheaper to store physical gold than pay the SPDR fees.

"Clearly some of the declines in the SPDR last quarter were associated with switching gold exposure, rather than selling," John Reade, UBS head metals strategist in London, told the news provider.

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