Gold rallies on weak economies

Vancouver — Whether it is another head fake or the start of a long-awaited rally, gold futures prices have climbed by nearly US$6 per oz. to their highest level in six weeks.

Many mining observers are citing Wednesday’s release of the United States Federal Reserve’s Beige Book, which showed slower growth during June and July, as the reason for the surge.

With the weak economic conditions, the high-flying U.S. dollar is started to drift lower. As it weakens against other currencies, gold becomes less expensive for overseas traders, who must exchange their currencies for dollars to buy the precious metal.

Gold for December delivery traded at US$276.40 per oz., up US$5.70 for the day on the Commodities Exchange division of the New York Mercantile Exchange. This marks its highest level since the week of June 25.

September silver rose by US4.8 to US$4.20 per oz.