Gold advanced for a third week as a weaker dollar and debt concerns boosted the metal’s appeal as an alternative investment. Silver gained to the highest level in 31 years.
Gold for immediate delivery rose 1.4 percent this week and was little changed at $1,506.85 an ounce at 6:48 p.m. in Paris after climbing to an all-time high of $1,512.47 earlier today. June-delivery futures touched a record $1,509.60 yesterday on the Comex in New York, the 10th all-time high this month. The exchange is closed today for the Good Friday holiday.
“The weak dollar is having the most influence on gold at the moment,” said Chae Un Soo, a Seoul-based trader at Korea Exchange Bank Futures Co. “The market is getting more jittery now that we have sovereign-debt concerns about the U.S. in addition to Europe and the Middle East problems, which increasingly boosts safe-haven demand for gold.”
The dollar slid to the lowest level since August 2008 against a basket of six major currencies this week on speculation that the U.S. Federal Reserve will be slow to raise borrowing costs. The Dollar Index is little changed today and is set for a 0.9 percent weekly drop. The Fed has kept the benchmark rate between zero percent and 0.25 percent since December 2008 and pledged to purchase $600 billion in Treasuries through June to stimulate the economy.
Standard & Poor’s this week cut its debt outlook for the U.S. to negative from stable. Violence in the Middle East, sovereign-debt turmoil in Europe and Japan’s nuclear crisis have helped propel bullion 31 percent higher in the past year.
“Overall trade for gold and other precious metals was extremely thin due to the market holiday in the U.S. and U.K.,” said Hiroyuki Kikukawa, general manager of research at IDO Securities Co. in Tokyo.
Silver for immediate delivery climbed 2.1 percent to $47.25 an ounce, the highest price since 1980. The metal has climbed 11 percent this week, a fifth weekly advance and the biggest weekly gain since Feb. 18.
Spot palladium fell 0.1 percent to $767.50 an ounce, while cash platinum was 0.3 percent higher at $1,822.50 an ounce.