Aug 17

Written by:
8/17/2010 9:38 AM 

By Claudia Assis and Kate Gibson | MarketWatch

SAN FRANCISCO - Gold futures found their way back to gains Tuesday as a weaker dollar and expectations of growing interest from end users brought futures back to a six-week high.

Gold had see-sawed after industrial production in the U.S. rose more than expected, which sapped some of the safe-haven support gold had enjoyed earlier in the session.

Gold for December delivery added $1.40, or 0.1 percent, to $1,227.60 an ounce on the Comex division of the New York Mercantile Exchange. A settlement around these levels would be the highest since late June.

"Everything about this market is looking up," said Scott Meyers, a senior trading analyst with Pioneer Futures, a division of MF Global, in New York. From hitting bottom in late July, when gold settled at $1,158 an ounce, "it has been a steady climb ... you got to love gold," he said.

On Monday, the contract closed at $1,226.20 an ounce, its highest close since late June.

Gold had lost some of its way after the Federal Reserve said Tuesday the output of the nation's factories, mines, and utilities rose 1 percent in July. Economists surveyed by MarketWatch had expected a 0.6 percent increase.

Equities opened higher on Tuesday on the data, although gains were moderate.

Gold kept drawing support, however, from the weaker dollar and steady appetite from buyers of physical gold, mainly in Asia.