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Gold off highs as dollar bounces from 1-mth low Jan Harvey LONDON, June 30 (Reuters) - Gold slipped from the five-week high it hit earlier in Monday's session, as the dollar bounced back from a one-month low against a basket of currencies. Firm oil prices, which are holding near the record highs they touched this morning, are continuing to support buying of the precious metal as an inflation hedge, however. Gold was at $928.10/929.10 an ounce at 1343 GMT, up from $927.20/928.20 an ounce late in New York on Friday. Earlier it touched a session high of $934.55 an ounce, its firmest level since May 22. (Article continues below)
"The dollar has come back, (and) gold has made good gains in the last couple of days, so we would expect to see it lightening up a tad," said BNP Paribas (other-otc: BNPQY.PK - news - people ) analyst David Thurtell. The dollar, which wilted last week after the U.S. Federal Reserve adopted a less hawkish tone than expected on interest rates, slid to a one-month low on Monday, battered by weak equities, strong oil and weak U.S. consumer confidence. However, it later bounced back to trade 0.2 percent higher against the euro on the day, supported by month- and quarter-end position squaring, traders said. A firmer dollar tends to pressure gold, which is often bought as a hedge against weakness in the U.S. currency. A stronger greenback also makes dollar-priced commodities more expensive for holders of other currencies. The other main external driver of gold, oil, is still underpinning the precious metal. Crude hit a new record of $143.67 a barrel on rising tension between Iran and Israel. Rising crude prices boost gold's appeal as a hedge against oil-led inflation, as well as fuelling investment interest in commodities in general. The stock market slide of late last week is also benefiting commodities as an asset class as traders seek alternative investments, analysts said. "Equities doing so badly over the last week has been good for commodities in general, and in terms of credit, default spreads have been rising," said Standard Bank analyst Walter de Wet. "That supports gold."
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