Gold climbs to record as dollar, inflation outlook spur demand

Gold climbs to record as dollar, inflation outlook spur demand
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First Published: Wed, Oct 14 2009. 12 36 AM IST
Updated: Wed, Oct 14 2009. 12 36 AM IST
London/Singapore: Gold rose to a record in New York and London on speculation that a weakening dollar and faster inflation will boost the appeal of precious metals.
Platinum and palladium climbed to the highest prices in more than a year, and silver advanced to its costliest since July 2008.
Bullion, which usually moves inversely to the dollar, is on course for a ninth annual gain after the dollar dropped 6.6% this year against a basket of six currencies. Futures reached $1,069.70 an ounce in New York, while spot gold climbed to $1,068.63 in London, surpassing the previous highs on 8 October.
“There’s lots of concern about the weakness in the dollar, and this has been driving gold,” Peter Fertig, the owner of Quantitative Commodity Research Ltd in Hainburg, Germany, said.
“The fear that central bank exit strategies will come too late to prevent inflation is giving support to gold.”
December gold futures gained $8.60, or 0.8%, to $1,066.10 an ounce on the New York Mercantile Exchange’s Comex division by 8:41am local time.
The metal has advanced 20% this year. Immediate-delivery bullion was 0.7% higher at $1,065 in London.
Gold rose in the morning fixing in London, used by some mining companies to sell production, to a record $1,064.50 an ounce from $1,058.75 at Monday’s afternoon fixing.
“As we start to see more evidence of economic recovery, we might see the momentum catalyst push gold higher,” said Darren Heathcote, head of trading at Investec Bank Ltd in Sydney.
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First Published: Wed, Oct 14 2009. 12 36 AM IST
More Topics: Gold | Dollar | Inflation | Platinum | Palladium |