Gold prices gain as Wall Street wavers

Mon Mar 9, 2009 3:22 PM EDT

business, wall-street, review, commodities

NEW YORK — Gold prices rose Wednesday, benefiting from a quieter day on Wall Street and as the dollar fell against other currencies. Oil prices and agriculture futures sank on new evidence that global demand is falling off.

Gold rose as investors bought stocks with far less intensity than they did on Tuesday, when Wall Street had its best one-day performance so far this year.

Meanwhile, the dollar showed some weakness against the euro and the British pound Wednesday. Though at times gold moves independently of the U.S. currency, it tends to rise when the greenback is weak. Investors often move into gold and out of the dollar as a shield against inflation, which is accelerated by a decline in the value of the dollar.

Gold for April delivery rose $14.80 to settle at $910.70 an ounce on the New York Mercantile Exchange. Prices soared in the beginning of the year, but have retreated since hitting an 11-month high of just over $1,000 an ounce late last month.

May silver added 26 cents to $12.80 an ounce, while May copper futures fell 5.9 cents to $1.6255 a pound.

After fluctuating throughout the day, stocks moved moderately higher in late afternoon trading on reports that JPMorgan Chase & Co. Chief Executive Jamie Dimon said the bank was profitable in January and February. The Dow Jones industrial average finished up nearly 4 points at 6,930. Broader stock indexes also finished higher.

Oil prices fell on a government report showing an unexpected climb in crude inventories and amid rising doubts about whether OPEC would cut production further.

Light, sweet crude for April delivery fell more than 7 percent, or $3.38, to settle at $42.33 a barrel.

In other Nymex trading, gasoline for April delivery fell 4.6 cents to $1.2512 a gallon, while heating oil slipped 6.56 cents to $1.1331 a gallon.

Investors sold off agriculture futures on the Chicago Board of Trade after a discouraging crop report from the U.S. Department of Agriculture.

In its March crop report, which forecasts global supply and demand, the USDA lowered its consumption estimates for wheat and corn, amid the ongoing recession.

"Obviously, they are getting more confirmation that the global recession is intensifying and it's impacting food usage," said Richard Feltes, senior vice president and director of commodity research for MF Global in Chicago, of the report.

May wheat futures dropped 24.5 cents to $5.0825 a bushel, while corn for May delivery shed 11 cents to $3.6450 a bushel. May soybeans fell 15 cents to $8.62 a bushel.