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Gold bounces back from Friday's slump

Release Date: 
Monday, November 15, 2010

China's possible interest rate hike for this past weekend did not materialize leading gold to recovery from its deepest drop of the second half of 2010, Bloomberg reports.

Gold climbed 0.6 percent to $1,376.28 per troy ounce just before 11 a.m. in Seoul after having dipped 2.8 percent on Friday. Prices for silver also increased as demand for investment opportunities with precious metals heightened.

"There was no interest rate rise over the weekend and, therefore, gold and precious metals are rebounding," Hwang Il Do, a senior trader at Korea Exchange Bank Futures Co. in Seoul, told Bloomberg. "The rebound may be limited though, because there remains concern China will raise interest rates."

China may increase the one-year lending rate to 5.81 percent in an effort to combat inflation rate. The country also increase its deposit rate by a quarter point to 2.75 percent as it now stands at 2.5 percent.

"Increased inflationary pressure could sustain investor interest in precious metals," according to Deutsche Bank AG analysts' November 12 report.

This news article is independently provided by Brafton and does not represent the views or opinions of Goldline International, Inc. Although the information in this news alert has been obtained from sources believed to be reliable, Goldline does not guarĀ­antee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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