Gold Climbs to Eight-Week High as Dollar Drop, Europe Debt Fueling Demand
Gold futures in New York climbed to the highest price in almost eight weeks as Europe’s lingering debt crisis and a weaker dollar spurred demand for the precious metal as an alternative asset.
The dollar fell as much as 0.8 percent against a basket of six currencies. Gold jumped 11 percent last month, the biggest January gain since 1983, on mounting concern that Europe’s debt woes may lead to a recession, and after the Federal Reserve pledged to keep its benchmark U.S. interest rate low until at least late 2014 to spur growth.
“Gold is trading like a hard currency,” James Dailey, who manages $215 million at TEAM Financial Management LLC in Harrisburg, Pennsylvania, said in an e-mail. “People are worried about currency debasement because of the credit easing by several countries.”
Gold futures for April delivery gained 0.5 percent to settle at $1,749.50 an ounce at 1:46 p.m. on the Comex in New York, the highest closing level since Dec. 2. Earlier, the price touched $1,754, the highest since Dec. 8. The metal has gained 31 percent in the past year.
Bullion may reach $2,000 by the fourth quarter, up from a first-quarter estimate of $1,850, analysts at Bank of America Merrill Lynch said today in an e-mailed report.
Gold climbed 10 percent in 2011, an 11th consecutive annual gain, reaching a record $1,923.70 in September, as investors sought to diversify from equities and some currencies.
Silver futures for March delivery rose 1.6 percent to $33.807 an ounce in New York. Yesterday, the price touched $34.13, the highest since Nov. 16.
On the New York Mercantile Exchange, platinum futures for April delivery advanced 2.2 percent to $1,623.20 an ounce. Palladium futures for March delivery rose 1.5 percent to $696.70 an ounce, rising for the first time in four sessions.
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