Declines in the market drove traders to gold as a safe haven investment to protect their assets. A stronger dollar kept the pressure on gold Friday and offset the gains that gold made from economic uncertainty.
SEPTEMBER 9, 2011, 10:02 A.M. ET
By Tatyana Shumsky Of DOW JONES NEWSWIRES
Wall Street Journal
NEW YORK (Dow Jones)--Gold held near steady Friday as declines in equity markets drove traders to what is widely seen as a good store of wealth, but the move was tempered by a stronger dollar.
The most actively traded contract, for December delivery, was recently up $1.30, or 0.1%, at $1,858.80 a troy ounce on the Comex division of the New York Mercantile Exchange.
Thinly traded September delivery gold was up 60 cents at $1,855.00 a troy ounce.
Gold prices had strayed into negative territory earlier in the trading session, but a weak open for stocks lured traders back to the haven asset.
The Standard & Poor's 500 index was recently down 18.25 points, or 1.5%, at 1167.65 points.
Investors often flock to gold during times of uncertainty as the yellow metal is considered a refuge from political and economic risk. By contrast, traders view equities as riskier assets than gold but ones likely to bring higher returns as well as steeper losses.
The inverse link between gold and stocks has been growing weaker in recent days, but gold prices continue to move in the opposite direction to stocks. The 30-day correlation between gold futures and the S&P 500 was recently at negative-0.6, down from negative-0.9 in mid-August, on a scale where negaitve-1 indicates a perfect inverse relationship.
A stronger dollar kept some pressure on gold prices Friday. Gold futures are denominated in dollars and appear more expensive to investors who use foreign currencies to buy gold.
The ICE Dollar Index was recently at 77.020, up from 76.265 late Thursday in New York.
-By Tatyana Shumsky, Dow Jones Newswires; 212-416-3095; email@example.com
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