Gold-Futures Prices Advance $6.60 on Concerns Over Mideast, Inflation and on Dollar's Weakness
NEW YORK -- Anxiety about developments in the Middle East, inflationary fears and the dollar's weakness in world foreign-exchange markets sent gold-futures prices surging $6.60 an ounce.</br></br>December gold ended at $417.90, just a dime shy of the day's highest trade, after reports of new threats by Iraqi President Saddam Hussein.</br></br>"This market is strictly being run by Iraq," said William O'Neill, senior futures strategist at Merrill Lynch. "Any sign of heightened tension is immediately being reflected in the gold market."</br></br>At the same time, he added, the rise in the price of gold reflected problems of the dollar and concern about inflation following release of the consumer price index for July. The government report showed that prices, excluding energy and food, rose 0.6%. Expectations had been for an increase of about 0.4%, Mr. O'Neill said.</br></br>Meanwhile, the U.S. Mint reported that sales of American Eagle gold coins are soaring, a strong indication of a flight to safety and away from dollar-denominated assets. In the first 14 days of August, sales of the coin totaled 44,000 ounces, the Mint said, more than in each of the three preceding months. Sales of the one-ounce version of the coin accounted for 41,500 ounces, a spokesman said.