Gold Gains for Fifth Day as Dollar’s Drop May Spur More Demand

Gold gained for a fifth day, the longest streak in two months, as a drop in the dollar may spur demand for precious metals as an alternative asset.

The dollar fell to a record against the yen and declined against the euro after European leaders agreed to expand a bailout fund by four or five times, to about 1 trillion euros ($1.4 billion). Gold has climbed 23 percent this year as the dollar fell 5.7 percent against the euro.

“The dollar’s weakness and inflationary fears because of Europe’s actions are making people move towards gold,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview.

Gold futures for December delivery rose $21, or 1.2 percent, to $1,744.50 an ounce at 12:33 p.m. on the Comex in New York. The five-day streak is the longest for a most-active contract since a six-day gain to Aug. 22.

Silver futures for December delivery jumped 4.7 percent to $34.89 an ounce on the Comex. Before today, the metal climbed 7.7 percent this year.

To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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