(RTTNews) - The price of gold gained on Wednesday and approached a 2 1/2 week high. Gold for December delivery moved to $835.40, up $7.30 on the session. The metal climbed to $841.40 in electronic trading.
The dollar firmed up Wednesday morning upon the release of data showing that durable goods orders rose much more than forecast in July. The buck spiked higher versus the yen and gained a bit of ground on the euro, paring its earlier losses. Gold generally moves opposite the dollar because of the precious metal's hedge appeal.
Gold turned higher on Tuesday, erasing some of the moderate declines it saw in a two-day slide. December gold closed a choppy session at $828.10, up $2.40 an ounce. Gold traded as low as $812 in the early going before moving as high as $836 later in the session.
The precious metal's hedge appeal got a boost from rising oil prices. Crude climbed towards $117 a barrel amid worries that Hurricane Gustav could cause havoc in the Gulf of Mexico's oil region next week.
The metal fell $3.80 in Monday's session. After ending Thursday's trading up $22.70 at $839 an ounce, gold gave back $5.50 on Friday to finish at $833.50 an ounce. Despite the decrease, the price of gold showed a notable upward move for the week, rising by more than $41 an ounce.
According to government data released Wednesday morning, durable goods orders rose 1.3 percent in July. Economists were looking for a very modest rise of 0.1 percent.
Crude oil moved above $118 a barrel again amid weather concerns in the Atlantic. Oil prices surged on Tuesday, finishing up $1.16 for the session. Prices had dropped as low as $112.36 in electronic trading, but later climbed as high as $117.89.
Tropical Storm Gustav could turn back into a hurricane later today or tomorrow. As a hurricane, Gustav reached landfall in Haiti on Tuesday afternoon, causing killer landslides. The storm is predicted to reach the Gulf of Mexico over Labor Day weekend, leading to concerns the oil supplies from the region could be disrupted.
Traders also considered a Department of Energy report that revealed lower year-over-year demand for crude oil in the month of June. Investors also looked ahead to Wednesday's inventory report. Last week's data showed U.S. commercial crude oil inventories increased by 9.4 million barrels in the week ended Aug. 15. However, motor gasoline inventories decreased by 6.2 million barrels in the week.
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