Gold up on weaker dollar, Fed’s interest rate decision

Gold prices rose Thursday as the US dollar weakened and as some speculated that it will weaken even more after the Federal Reserve held US interest rates at an all-time low and indicated that they will remain there for an extended period, at least until into next year.

A weaker dollar traditionally makes gold look like a safer place for people to put their cash, increasing demand for the precious metal.

August gold closed up $11.10 to $1,245.90 per troy ounce in New York, its highest close since hitting an all-time high close last Friday, but it fell from its intraday high at $1,249.59 per troy ounce after the US Commerce Department reported that durable goods orders dropped 1.1 percent overall in May, mostly due to a 30 percent drop in orders for aircraft.

Additionally, July silver was up 28 cents to $18.73 per troy ounce in New York trade.

Copper prices were higher on the more optimistic take that, when transportation orders are excluded, US durable goods orders were up 0.9 percent in May, as well as on bets that continuing lower interest rates in the US will boost demand for the metal used in manufacturing and construction.

July copper added 7 cents to $3 per pound in New York trade, while three-month contracts were $179 higher to $6,694 per tonne on the London Metal Exchange, and might have gained more except for yesterday’s report that new home sales in the US were significantly lower in May.

Prices for other base metals rose along with copper.