Gold Climbs to 4-Week High as Weaker Dollar Spurs Demand
Gold rose to a four-week high in London as a weaker dollar increased the metal’s appeal as an alternative asset.
The dollar declined versus the euro amid speculation the world’s leading economies will collaborate on a response to Europe’s debt crisis. Federal Reserve Bank of Chicago President Charles Evans said recent U.S. economic data warrant “extremely strong accommodation.”
“A weaker dollar would implement stronger gold,” Afshin Nabavi, a senior vice president at bullion refiner MKS Finance SA in Geneva, said today by phone. “The safe-haven investor has been very shy since December. If they decide to get back into the market, then there’s potential for a lot of upside.”
Bullion for immediate delivery rose as much as 1.3 percent to $1,637.40 an ounce, the highest price since May 8, and was at $1,633.38 by 11:21 a.m. in London. August-delivery futures were 1.1 percent higher at $1,634.60 on the Comex in New York.
The metal is up 4.5 percent this year after 11 consecutive annual increases. Gold at the morning “fixing,” used by some mining companies to sell output, rose to $1,633.25 an ounce in London from $1,606 in the afternoon of June 1. There were no fixings the previous two days because of U.K. public holidays.
Group of Seven finance ministers and central bank governors agreed to help Spain and Greece place their public finances on a sustainable footing, Japan’s Finance Minister Jun Azumi told reporters in Tokyo following a conference call yesterday. European Central Bank officials meeting in Frankfurt will leave interest rates at 1 percent today, according to economists surveyed by Bloomberg News.
“Finding a way to deliver more accommodation -- whether it is monetary or fiscal -- is particularly important now because delays in reducing unemployment are costly,” Evans said in a speech yesterday in New York. “Failure to act aggressively now will lower the capacity of the economy for many years to come.”
Silver for immediate delivery rose as much as 2.8 percent to $29.3425 an ounce, the highest price since May 10, and was last at $29.3275. Palladium was little changed at $624.25 an ounce, after reaching $629.50, the highest price since May 8. Platinum climbed as much as 2.4 percent to a two-week high of $1,472.25 an ounce, and last traded at $1,461.
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