Gold, Silver Jump as Dollar Drops on Federal Reserve's Discount Rate

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Gold futures for December delivery rose $12.90, or 2 percent, to $670.90 an ounce at 9:29 a.m. on the Comex division of the New York Mercantile Exchange. A close at that price would mark the biggest percentage gain since Feb. 21. Before today, the metal gained 3.1 percent this year.

Gold in New York rose the most since February, and silver rebounded after the Federal Reserve reduced its discount rate, sending the dollar lower and increasing the allure of precious metals as an alternative investment.

The Fed cut the rate at which it makes direct loans to banks by 0.5 percentage point to 5.75 percent and said it's prepared to take further action following the rout in global credit markets. Gold often moves in the opposite direction to the dollar, which dropped as much as 0.7 percent against the euro. Yesterday, gold fell 3.2 percent, the most since October...

Gold futures for December delivery rose $12.90, or 2 percent, to $670.90 an ounce at 9:29 a.m. on the Comex division of the New York Mercantile Exchange. A close at that price would mark the biggest percentage gain since Feb. 21. Before today, the metal gained 3.1 percent this year.

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