Associated Press

NEW YORK (AP) -- Gold prices touched a record high Tuesday after disappointing reports on Europe's economy, a weaker dollar and a seasonal increase in demand for gold jewelry.

Two new reports called into question the strength of Europe's economy. German investor confidence fell sharply in September, and industrial production unexpectedly slowed during July in the countries that use the euro. Weak economic growth worldwide often drives investors into park money in gold futures.

"As long as there is still uncertainty in the market, there should be support for gold," said William Rhind, strategic director for ETF Securities.

Gold for December delivery touched a record of $1,276.50 during Tuesday trading, before settling $24.60, or 2 percent, higher at $1,271.70 an ounce.

Silver followed gold, rising 28.1 cents to $20.432 an ounce. It also touched a new high of $20.55 an ounce during the day.

The dollar fell against other major currencies, which typically leads to more investments in commodities. A weaker dollar makes commodities priced in dollars more attractive for foreign investors.

Rhind said gold was getting an additional lift from a seasonal jump in demand heading into Indian wedding season. Jewelry still accounts for between 40 percent and 50 percent of gold demand, Rhind said, so periods where jewelry demand climbs often leads to a jump in prices.

Platinum and palladium, other metals that can benefit when investors are seeking alternatives to the dollar also rose sharply.

Palladium for December delivery jumped $24.00, or 4.5 percent, to settle at $553.80 an ounce, while platinum for October delivery rose $44.50, or 2.9 percent, to $1,594.40 an ounce.

Copper fell following the disappointing economic reports out of Europe. It settled 1.05 cents lower at $3.46.85 a pound.

Energy and grain prices were mixed. Corn was the biggest gainer among grains as questions about production remain. Corn for December delivery climbed 11.5 cents, or 2.4 percent, to $4.95 a bushel. Wheat fell 9 cents to $7.36 a bushel.

Soybeans for November delivery rose 1 cent to settle at $10.355 a bushel.

Benchmark crude for October delivery lost 39 cents to settle at $76.80 a barrel on the New York Mercantile Exchange.

Natural gas gained 2.8 cents to settle at $3.966 per 1,000 cubic feet on the Nymex.

In other energy trading heating oil rose 0.61 cent to settle at $2.1288 a gallon and gasoline fell 1.16 cents to settle at $1.9690 a gallon.

Copyright 2010 The Associated Press.

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