$10 dollar bills at par.  (Chris Young/CP)

The Canadian Press

TORONTO — The Canadian dollar CAD/USD-I closed higher against the greenback Wednesday while gold prices GC-FT continued to tumble from record high levels.

The loonie was up 0.15 of a cent at $1.0136 (U.S.).

Gold prices fell for a second session as traders took profits from a string of record high closes that pushed bullion to just below the $1,900 mark on Monday.

The price of the precious metal in New York fell $104 to $1,757.30 an ounce on top of Tuesday’s $31 drop.

Investors had fled to gold over the last few weeks as stock markets TSX-I turned volatile on worries about the European debt crisis and fears the United States might slip back into recession.

The Canadian dollar had earlier moved as high as $1.016 following some positive economic news from the United States, Canada’s biggest trading partner.

Durable goods orders for July jumped 4 per cent, much better than the 2.2 per cent increase that economists had expected.

Excluding transportation goods, orders rose 0.7 per cent.

But markets were also cautious ahead of a widely anticipated speech Friday by Federal Reserve Chairman Ben Bernanke.

Investors hope that the central bank chief will announce more stimulus for the U.S. economy at an economics conference in Jackson Hole, Wyo.

However, “expectations for what Bernanke might deliver at Jackson Hole on Friday seem to be diminishing somewhat after press reports of resistance within the Fed to further [stimulus],” said George Davis, a technical analyst at RBC Capital Markets.

Sentiment was dented somewhat after Moody’s Investors Service downgraded Japan’s credit rating to Aa3 from Aa2, citing weak growth prospects for the world’s No. 3 economy, massive government debt and constant political uncertainty.

The new rating is three notches below Moody’s top Aaa rating.

The European debt crisis was also in focus as Austria insisted Wednesday it will seek collateral from Greece for participating in bailing out Athens as long as Finland has the same deal.

The Finns have struck a deal to secure 20 per cent cash security guarantees from Greece.

Other eurozone countries, including rich members like the Netherlands and Germany, oppose the deal, since it would be financed through Greece’s €109-billion bailout.

Other commodities were also weak after earlier receiving some lift from the durable goods report.

The October crude contract CL-FT on the New York Mercantile Exchange closed down 28 cents to $85.16 a barrel after rising about $3 over the past two sessions.

Copper HG-FT was unchanged at $4 a pound.

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