Gold Rises on Dollar Weakness, May Gain More as Asia Banks Build Reserves
Oct. 13 (Bloomberg) -- Mr. T talks with Pimm Fox on Bloomberg Television's "Taking Stock" about Cash America International Inc.'s "Gold Promise" service which allows people sell gold jewelry through the mail. Bloomberg's Dominic Chu also speaks. (Source: Bloomberg)
Oct. 13 (Bloomberg) -- Jeffrey Nichols, an economic adviser at Rosland Capital, and George Gero, senior vice president at RBC Capital Markets, talk about the outlook for gold prices. They talk with Pimm Fox on Bloomberg Television's "Taking Stock." (Source: Bloomberg)
Gold climbed to a record for a second day as a weaker dollar spurred demand for an alternative investment. Silver futures extended a rally to a 30-year high.
The greenback dropped to the lowest level in 10 months against a basket of six major currencies on bets that the Federal Reserve will buy more debt to sustain the economic recovery. Asian central banks may continue to increase gold reserves, said the Bank of Nova Scotia.
“There is a distrust of currencies, and gold is the only solution,” said Bernard Sin, the head of currency and metal trading at bullion refiner MKS Finance SA in Geneva. “A lot of money is going into precious metals,” and there’s demand from India because of the country’s festival season, he said.
Gold futures for December delivery added $7.10, or 0.5 percent, to close at $1,377.60 an ounce at 1:50 p.m. on the Comex in New York, after reaching an all-time high of $1,388.10. The previous record was $1,375.70.
Gold, up 26 percent this year, is heading for its 10th consecutive annual gain. The metal rallied as central banks and governments maintained low borrowing costs and spent trillions of dollars to stimulate economies.
On Oct. 4, Fed Chairman Ben S. Bernanke said that the central bank’s first round of large-scale asset purchases aided the economy and that further buying is likely to help more. He is scheduled to speak about monetary policy in Boston tomorrow.
‘Currency Hedge’
“Markets continued to price in a second round of U.S. quantitative easing, which is expected to pressure the U.S. dollar and support gold as a currency hedge,” Mark Pervan, a senior commodity strategist at Australia and New Zealand Banking Group Ltd., wrote in a report today.
Bullion for immediate delivery touched a record $1,387.35 in London today.
Silver futures for December delivery advanced 50.30 cents, or 2.1 percent, to $24.435 an ounce in New York. Earlier, the price reached $24.95, the highest level since March 1980.
Platinum futures for January delivery gained $5.20, or 0.3 percent, to $1,712.60. Palladium futures for December delivery jumped $7.90, or 1.3 percent, to $601.55 an ounce.
To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Sungwoo Park in Seoul at spark47@bloomberg.net.
To contact the editors responsible for this story: Steve Stroth at sstroth@bloomberg.net.
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