Gold Futures Rally as Slumping Dollar May Boost Demand for Precious Metal
Gold futures climbed to the highest settlement price in five weeks as a slumping dollar boosted the appeal of the precious metal as an alternative asset.
The greenback declined for the second day against a basket of major currencies after U.S. factory output in December climbed the most in a year as production of business equipment, automobiles and construction materials rose, figures from the Federal Reserve showed today. The International Monetary Fund proposed boosting its resources by as much as $500 billion to safeguard the global economy.
“The dollar’s weakness is supporting gold,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview.
Gold futures for February delivery rose 0.3 percent to close at $1,659.90 an ounce at 1:39 p.m. on the Comex in New York, the highest settlement since Dec. 13. Prices are up 5.9 percent this month.
“Gold is facing technical resistance at the $1,660 level,” Meger said.
Silver futures for March delivery rose 1.4 percent to $30.543 an ounce in New York, climbing for the second straight session.
On the New York Mercantile Exchange, platinum futures for April delivery fell 0.2 percent to $1,525.30 an ounce. Palladium futures for March delivery rose 2 percent to $668.50 an ounce, the highest settlement since Dec. 9.
To contact the reporter for 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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