Gold edges higher as investors seek safety

The price of gold was a bit higher Wednesday, but it was not able to rise above the $1,200 per troy ounce level.

December gold added $1,20 to $1,199.20 per troy ounce in New York as the US dollar strengthened but new data caused investors to seek safe places to put their cash after the Commerce Department reported that the US trade deficit was up to a nearly two-year high in June as it rose to $49.9 billion on surging imports while exports struggled.

Earlier in the session, gold rose as high as $1,210.20 per troy ounce but it could not hold on to those gains.

On the other hand, September silver was 26 cents lower to $17.90 per troy ounce.

Among base metals, September copper was down 6 cents to $3.25 per pound in New York trade, while three-month contracts on the London Metal Exchange dropped $100 to $7,200 per tonne.

The declines in copper prices came on concerns that China’s economic growth will lag after new data indicated that factory activity there is slowing, and on the US Federal Reserve’s statement yesterday that economic recovery in the US is not proceeding as quickly as had been anticipated, as investors worried that slow growth will dent demand from the world’s two biggest consumers of metals.

Prices for aluminium, zinc, tin, lead and nickel were also lower in London trade.