Gold futures rebounded as the dollar’s drop boosted demand for the precious metal and commodities as alternative investments.
The Standard & Poor’s GSCI Index of 24 raw materials jumped as much 1.2 percent and the greenback fell as much as 0.2 percent against a basket of 10 major currencies after Senate leaders reached an agreement that would end the fiscal impasse and increase U.S. borrowing authority, a day before it lapses. The Senate and House may vote on the accord as soon as today.
“The dollar’s weakness is helping gold,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a telephone interview. “Also, higher metal and energy prices are helping.”
Gold futures for December delivery rose 0.7 percent to settle at $1,282.30 an ounce at 1:45 p.m. on the Comex in New York. Earlier, the price dropped as much as 0.4 percent.
This year, the metal has slumped 23 percent, heading for the first annual decline since 2000. Some investors lost faith in gold as a store of value after equities rallied to a record and inflation remained muted.
Silver futures for December delivery rose 0.8 percent to $21.365 an ounce. The metal has tumbled 29 percent this year.
On the New York Mercantile Exchange, platinum futures for January delivery increased 1.1 percent to $1,398.20 an ounce. Palladium futures for December delivery climbed 1 percent to $713.55 an ounce.