Gold Advances Most in Two Weeks as Dollar Decline Spurs Demand
Gold advanced the most in two weeks as the dollar dropped for the fifth straight session, increasing demand for the precious metal as an alternative investment.
The Bloomberg Dollar Index, a gauge against 10 major trading partners, fell as much as 0.5 percent, heading for the longest slide since April. Exports rebounded in China, signaling improving economic growth in the world’s biggest bullion buyer after India.
“The continued weakness in dollar is making gold look attractive,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “Also, there is some buying in anticipation of a rise in retail Chinese demand as the economy improves.”
Gold futures for December delivery rose 1.4 percent to $1,303.60 an ounce at 10:40 a.m. on the Comex in New York, heading for the biggest gain since July 22.
Through yesterday, prices tumbled 23 percent this year partly on concern that the Federal Reserve will trim its monetary stimulus as the U.S. economy improves. The fewest Americans applied for unemployment benefits over the past month since before the last recession, a Labor Department report showed today.
“Continued weakness in the dollar is negating the effect of the good jobs data,” Lesh said.
China may top India to become the largest importer of gold this year, according to London-based World Gold Council.
Silver futures for September delivery rose 2.9 percent to $20.075 an ounce, heading for the biggest gain for a most-active contract since July 22.
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