Gold jumped the most in three weeks as the dollar declined for the first time in eight sessions, boosting demand for the precious metal as an alternative investment.
The Bloomberg Dollar Spot Index, a measure against a basket of 10 currencies, fell as much as 0.4 percent, ending the longest rally since May. Bullion gained 3 percent this month through yesterday as demand for coins, jewelry and bars increased after prices dropped to a six-month low on Dec. 31.
“The dollar is helping gold today,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “Physical demand has remained steady from the East,” he said, referring to Asia.
Gold futures for April delivery rose 1.6 percent to $1,258.20 an ounce on the Comex at 10 a.m. in New York, heading for the biggest jump since Jan. 2. Trading was 94 percent above the average for the past 100 days for this time of day, data compiled by Bloomberg showed.
Bullion slid 28 percent last year, the most since 1981. Some investors lost faith in the metal as a store of value amid a rally in equities and low inflation. The Federal Reserve said Dec. 18 that it would cut monthly bond purchases to $75 billion from $85 billion purchases. Fed policy makers meet Jan. 28-29.
Silver futures for delivery in March gained 2 percent to $20.235 an ounce. Palladium futures for March delivery fell 0.4 percent to $745.90 an ounce on New York Mercantile Exchange. Platinum futures for April delivery climbed 0.3 percent to $1,467.20 an ounce.
At least 70,000 workers in South Africa began a strike today over wages at the world’s biggest platinum mines. The stoppage by the Association of Mineworkers and Construction Union will disrupt operations accounting for about 70 percent of global output of the metal.
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