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Thursday, Jan 31, 2013 10:15 PM UTC

Gold prices sink after report shows incomes rising

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Topics: From the Wires,

NEW YORK (AP) — Gold prices sank Thursday after a report showed that Americans’ incomes surged in December.

Gold for April delivery lost $19.60, more than 1 percent, to settle at $1,662 per ounce.

The Commerce Department said Thursday that personal income jumped 2.6 percent from November to December, the biggest monthly gain since 2004. The big drivers were dividend payments and bonuses, which companies moved up to help high-income earners avoid tax increases in 2013.

The news helped ease worries that the economy could be headed for a rough patch, said James Steel, chief commodities analyst at HSBC in New York. The government said Wednesday that the economy shrank slightly in the last three months of 2012.

“The income report was enough to dispel some of the angst from the day before,” Steel said.

Traders pushed gold prices up Wednesday on the expectation that the Federal Reserve would keep interest rates at record low levels to spur economic growth. Low interest rates could weaken the demand for dollars and spur inflation, making gold more appealing by comparison.

Silver followed gold lower Thursday. Silver for March delivery sank 82.6 cents, more than 2 percent, to $31.35 per ounce.

Other metals also dropped. March copper sank 1.8 cents to $3.7320 per pound. April platinum dipped $13.90 to $1,675.40 per ounce. March palladium fell $5.70 to $745.70 per ounce.

Prices for key crops ended slightly lower. Wheat fell 7.5 cents to $7.795 per bushel. Corn was nearly flat, slipping 0.25 of a cent to $7.405 per bushel. Soybeans fell 10.25 cents to $14.685 per bushel.

The price of oil fell Thursday, weighed down by news that unemployment claims rose more than expected last week.

Benchmark oil for March delivery fell 45 cents to close at $97.49 a barrel on the New York Mercantile Exchange.

In other energy trading on Nymex:

— Wholesale gasoline lost 1 cent to $3.03 per gallon.

— Natural gas was flat at $3.34 per 1,000 cubic feet.

— Heating oil rose 1 cent to $3.13 a gallon.

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