Gold Rises as Dollar Set for Longest Slump in Seven Weeks
Gold futures rose for the fourth straight session as the dollar’s longest slump in seven weeks boosted demand for the metal as an alternative investment.
The greenback fell for the fourth straight session against a basket of 10 major currencies, the longest slide since April 30. On June 19, gold surged 3.3 percent, the most in nine months, as the Federal Reserve policy makers said that U.S. interest rates will remain low for a considerable time.
“The dollar is still reacting to the dovish Fed statement, and that is supporting gold,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview. “Gold, however, is still stuck in a range.”
On the Comex in New York, gold futures for August delivery rose 0.1 percent to settle at $1,318.40 an ounce at 1:34 p.m. On June 20, the price reached $1,322.50, the highest for a most-active contract since April 15.
Gold headed for a second straight quarterly gain for the first time since 2011 as demand for a haven increased amid mounting violence in Iraq and conflict between Ukraine and Russia.
Hedge funds and other money managers increased bullish bets on gold by 30 percent in the week ended June 17, the biggest gain since February, government data showed on June 20.
The precious metal climbed 70 percent from December 2008 to June 2011 as the Fed bought debt and held borrowing costs near zero percent, boosting inflation concerns.
Last week, gold’s 60-day historical touched reached the lowest since October 2010, according to data compiled by Bloomberg. The price tumbled 28 percent last year as U.S. equities rose to a record and the Fed tapered monetary stimulus as the economy improved.
Silver futures for September delivery fell 0.1 percent to $20.964 an ounce on the Comex. The price rose in the previous 10 sessions, the longest rally in four months. The metal has climbed 8.2 percent this year, while gold advanced 9.7 percent.
On the New York Mercantile Exchange, platinum futures for July delivery fell less than 0.1 percent to $1,456.60 an ounce. Earlier, the price fell as much as 1.1 percent as 70,000 workers agreed to end a five-month strike in South Africa, the world’s top producer.
Trading doubled compared with the 100-day average for this time, according to data compiled by Bloomberg.
Workers may be back on the job by June 25. The strike crippled metal output and caused the economy to contract in the first quarter.
Palladium futures for September delivery climbed 0.1 percent to $822.65 an ounce. The price dropped as much as 1.4 percent. Russia is the biggest producer, followed by South Africa.
This year, platinum has gained 6 percent this year, and palladium has advanced 15 percent.
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