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Tuesday, May 17, 2011

why Gold futures edged higher on Tuesday may 17 2011

why Gold futures edged higher on Tuesday may 17 2011 - Gold futures rise on euro zone debt woes, Asian buying ; Gold futures edged higher on Tuesday, as ongoing concerns over the euro zone's sovereign debt crisis and increased physical demand from Asia boosted prices. On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,495.65 a troy ounce during late Asian trade, gaining 0.38%.

It earlier rose as much as 0.42% to a daily high of USD1,496.75 a troy ounce. European Union finance ministers approved Portugal's EUR78 billion bailout on Monday and for the first time floated the idea of talks with bondholders over extending Greece's debt-repayment schedule.

Moody's Investor Service said on Monday that a Greek default would be "highly destabilizing" for the global financial system.

Meanwhile, strong physical demand in Asia helped offset gains in the U.S. dollar, which was up 0.16% against a basket of six other major currencies.

Buyers in India, the world's largest gold consumer, bought the precious metal as one of the major gold-buying festivals of Akshaya Tritiya began and as India's wedding season gathered pace.

Elsewhere, global financial servicer provider HSBC raised its 2011 price forecast for gold to USD1,525 an ounce from a previous forecast of USD1,450, saying "the concerns that have driven gold for much of this year - inflation, low interest rates and economic uncertainty - remain."

Data on Monday showed that that inflation in the euro zone reached a 30-month high of 2.8% in April, boosting gold's appeal as a hedge against inflation.

Elsewhere, silver for July delivery climbed 1.17% to trade at USD33.95 a troy ounce during late Asian trade, after rising by as much as 2% to a daily high of USD34.28. (Source:community.nasdaq.com... )

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