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Tuesday, November 21, 2006

Gold Gains as the Dollar Dips tells how a sliding dollar is starting to light a fire under gold today...

Gold plowed ahead Tuesday, helped by speculator interest and a softer dollar. December-dated gold contracts rallied $6.60 to close at $628.70 an ounce on the Comex division of the New York Mercantile Exchange.

Read the whole thing.

But what the story misses is that rising oil prices are also boosting gold. The Trans-Alaska Pipeline just announced it is going to limit the amount of oil it will carry to 35% of normal, and a North Sea platform shut down due to a gas leak.

And then there's the fact that OPEC is talking VERY LOUDLY about cutting output again.

With that going on, who wants to be short oil over a long weekend? Not me! Rising oil prices stoke inflation fears, and that sends gold higher.

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