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Gold steadies near 5-week high on global growth concerns

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Forex Pros – Gold futures edged higher on Tuesday, trading close to a five-week high as concerns over the global economic recovery and a broadly weaker U.S. dollar enhanced the appeal of the precious metal.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,546.45 a troy ounce during late Asian trade, easing up 0.11%.

The August contract traded between a range of USD1,543.35, the daily low and USD1,546.75, the daily high.

Gold futures rose to a five-week high on Monday as mounting concerns over the U.S. economic recovery dampened expectations the Federal Reserve would tighten its monetary policy in the near-term.

Global financial service provider Commerzbank said in a report late Monday that, “Weak U.S. economic data last week are strengthening expectations that the Federal Reserve will maintain key interest rates at the current very low level for even longer, which will keep the opportunity costs for precious metals low.”

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.29% to trade at 74.19.

Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.

Meanwhile, ongoing worries over Greek sovereign debt continued to support prices. European Union Economic and Monetary Affairs Commissioner Olli Rehn said on Monday that Greece “is facing a default unless there is help.”

Senior euro zone officials agreed on a tentative deal to give debt-laden Greece more financing last week. But the German government said Monday it won't decide on fresh aid for Greece until a review of the current rescue program from the European Commission, the European Central Bank and International Monetary Fund was published.

Elsewhere, silver for July delivery added 0.45% to trade at USD36.76 a troy ounce during late Asian trade, while copper for July delivery eased up 0.1% to trade at USD4.127 a pound.

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