Aug. 7 (Bloomberg) -- Gold futures rose, snapping the longest slump in 11 weeks, as the dollar’s decline increased demand for the metal as an alternative investment.
The Bloomberg Dollar Index slid 0.3 percent, heading for the longest slide in seven weeks against a basket of 10 currencies. Gold has tumbled 23 percent this year, while the greenback gauge has climbed 3.5 percent amid speculation that the Federal Reserve will scale back U.S. debt purchases.
“The weaker dollar is helping gold,” Sterling Smith, a Chicago-based commodity futures specialist at Citigroup Inc., said in a telephone interview. “The market will continue to remain nervous until we get some clarity about the tapering timetable” from the Fed, he said.
Gold futures for December delivery gained 0.2 percent to settle at $1,285.30 an ounce at 2:07 p.m. on the Comex in New York. Earlier, the price touched $1,271.80, the lowest for a most-active contract since July 17. The metal dropped in the previous six sessions, the longest slump since mid-May.
In July, gold rose 7.3 percent, the most since January 2012, after Fed Chairman Ben S. Bernanke said it’s too early to decide whether to pare asset buying next month. Fed Bank of Chicago President Charles Evans, who has backed monetary stimulus, said yesterday that the labor market showed “good improvement,” and he indicated a cut in debt purchases may begin in September.
Silver futures for September delivery dropped 0.1 percent to $19.508 an ounce on the Comex. Earlier, the price touched $19.10, the lowest since July 10.
On the New York Mercantile Exchange, platinum futures for October delivery climbed 0.7 percent to $1,438.30 an ounce, the first gain in three days.
Palladium futures for September delivery rose 35 cents to $723.15 an ounce.
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