Gold prices edge lower after US inflation data
Gold prices shed about US$3 per ounce this afternoon after it was reported that growth in consumer prices in the US slowed, reducing gold's appeal as an inflation hedge.
The US Labor Department said earlier today that its consumer price index fell 0.2 percent in June after climbing 0.2 percent in May, which analysts were expecting to see a smaller decline.
However, gold managed to find enough support to stay above the US$1,580 per ounce level as its rival asset, the US dollar, was hit by Standard & Poor's warning that it may cut America's credit rating.
US President Barack Obama and the US Congress are still trying to work out a deal to raise the country's debt ceiling and avoid a default. The borrowing limit has to be extended before the 2 August deadline.
In addition to that, traders were buying gold to protect wealth ahead of the results of the latest stress test of European banks, which will be announced in late afternoon.
Gold last traded at US$1,583/oz. Silver followed the yellow metal, rising 48 cents to US$38.67/oz, while platinum moved in the opposite direction, falling US$5 to US$1,757/oz.
Today's top risers in the sector were:
ECR Minerals (LON:ECR), up 9.5 percent at 2.33 pence at midday
Mariana Resources (LON:MARL), up 7 percent at 19.80 pence
Trans-Siberian Gold (LON:TSG), up 7 percent at 95.25 pence
Stratex International (LON:STI), up 6 percent at 9.19 pence
Shanta Gold (LON:SHG), up 5 percent at 19.88 pence
Today's top fallers were:
Orsu Metals (LON:OSU), down 12 percent at 2.75 pence at midday
North River Resources (LON:NRRP), down 6 percent at 1.99 pence
Eurasia Mining (LON:EUA), down 6 percent at 0.94 pence
Oxus Gold (LON:OXS), down 6 percent at 0.8 pence
GMA Resources (LON:GMA), down 5 percent at 0.714 pence
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