Gold Extends Gains Trading Near $906

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China's decision to hike fuel prices again reflects the level of concern toward inflation, and will continue to draw investment demand towards gold," said James Moore, an analyst at TheBullionDesk.com, in a research note.

Gold for August delivery gained $1.80 to $906 an ounce on the New York Mercantile Exchange.

On Thursday, gold futures closed at their highest level in more than three weeks as concerns over global economies and a decline in South African gold production lifted prices back above $900 an ounce. Gold rallied $10.70 an ounce, or 1.2%. In energy trading, crude futures rose sharply, recovering a portion of their sharp fall in the previous session, as weakness in the dollar and expectations that Saudi Arabia will announce a hike in output boosted prices.

Crude futures dropped nearly $5 a barrel on Thursday, retreating after China, the world's second-largest oil consumer, announced a surprise increase in fuel prices. "China's decision to hike fuel prices again reflects the level of concern toward inflation, and will continue to draw investment demand towards gold," said James Moore, an analyst at TheBullionDesk.com, in a research note.

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