Daily Gold Update

Source: CBS.Marketwatch

San Francisco— Gold futures climbed above $448 an ounce to a seven-week high Thursday and metals-mining indexes rose to their loftiest level since March as a weaker U.S. dollar and record oil prices sparked the return of precious metals' appeal as a defensive investment.

December gold traded as high as $448.50 an ounce on the New York Mercantile Exchange, a level not seen since June 24, when prices touched $450. The benchmark was last at $447.80, up $5.80.

The U.S. dollar sagged against its European and Japanese counterparts as a mixed bag of U.S. data was overshadowed by brighter economic prospects elsewhere.

Foreign demand for gold, which is denominated in dollars, rises when the U.S. currency weakens because overseas traders need to pay less in local currency to make purchases. Gold is also seen as a hedge against financial losses.

At the same time, oil prices continued to reach records Thursday, with September crude rising above $65 a barrel in New York.

"A continued decline in the dollar will garner an increasing amount of market focus, and with oil prices periodically making some noise, there could even be a little sprinkling of inflationary talk," Nell Sloane, an analyst at NSFutures.com, said in a daily commentary.

From here, prices won't likely be "able to break out above $451 without gold backing up first," said Dale Doelling, chief market technician at Trends In Commodities.

"Another break back to the $430 level would allow the market to work off some of the froth and allow it to finally rally to new highs," he said.

Elsewhere on Nymex, silver for September delivery traded at $7.145 an ounce, up 6.7 cents.

September palladium traded down 45 cents at $187.25 an ounce, while October platinum stood at $916.40 an ounce, up $8.90.

September copper rose 0.35 cent to $1.638 a pound after climbing almost 2% on Wednesday.

Tracking inventories, copper supplies were down 375 short tons at 8,979 short tons as of late Wednesday, according to Nymex. Silver stocks were down 50,203 troy ounces at 111 million, while gold inventories stood at 5.9 million troy ounces, down 32 troy ounces from the previous session.