Daily Gold Update

Source:Bloomberg

New York— Gold rose to the highest closing price in seven weeks as investment demand for the metal increased after reports showed a gain in U.S. producer prices and a rise in initial claims for jobless benefits. Silver also advanced. The number of first-time applicants seeking unemployment insurance jumped to 637,000 last week, threatening to restrain consumer spending and prolong the recession. A separate report showed prices paid to U.S. producers climbed in April, paced by a 1.5 percent increase in consumer foods, pushing back the risk of deflation taking root in the economy. �There is some rotation from other markets into gold, mainly because of safe-heaven demand,� said Stephen Platt, an Archer Financial Services Inc. commodity analyst in Chicago. �The market could certainly work itself higher.�

Gold futures for June delivery rose $2.50, or 0.3 percent, to $928.40 an ounce on the New York Mercantile Exchange�s Comex division. That�s the highest close for a most-active contract since March 26. Silver futures for July delivery advanced 2 cents, or 0.1 percent, to $14.04 an ounce. The most-active contract is up 24 percent this year, while gold has gained 5 percent. See full story.