Gold prices rise as USD weakens

The price of gold was up again Tuesday as the US dollar weakened and investors expected more interest from physical buyers of gold for jewelry as India‘s festival season approached, while prices for platinum and palladium were higher on a report that US industrial production expanded more than expected in July.

December gold added $2.10 to $1,228.30 per troy ounce in New York trade, while October platinum was up $9.30 to $1,546.60 per troy ounce and September palladium gained $11.55 to $497. 30 per troy ounce.

The gains for platinum and palladium came on a report from the US Federal Reserve that industrial production overall added 1 percent in July, ahead of predictions of an 0.6 percent expansion, and that automobile production gained 9.9 percent during the month.

Both platinum and palladium are used in the manufacture of pollution control devices for motor vehicles.

September copper was up 6 cents to $3.34 per pound in New York, while three-month contracts were $132 higher to $7,382 per tonne on the London Metal Exchange after inventories in LME-monitored warehouses declined again.

Investors ignored data showing that US housing starts did not rise as much as expected in July, putting in question how much demand for copper there will be, considering that a fourth of all copper consumption goes into building construction.

They also paid little attention to a prediction from Bank of America Merrill Lynch that copper prices could fall to $6,500 per tonne in the next few weeks, preferring to concentrate on the possibility, also mentioned, that they could rise to $8,000 per tonne next year.

Other base metals prices followed copper higher in London trade.