Gold advances for a second day as the dollar weakens

The U.S. Dollar Index, a six-currency gauge of the greenback's strength, fell after last week climbing to the highest level in almost seven months. Gold, which usually moves inversely to the dollar, slid to a three-month low of US$1,044.85 an ounce on Jan. 5. Equities climbed, reducing the chance that investors might have to sell bullion to cover losses. “The dollar is down and stock markets have recovered,” said Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany.

Gold for immediate delivery gained US$6.40, or 0.6 percent, to US$1,072.70 an ounce at 9:30 a.m. local time. Prices declined 1.4 percent last week, a fourth consecutive drop. Bullion for April delivery was 1.9 percent higher at US$1,073.20 on the New York Mercantile Exchange's Comex unit. The metal should trade at US$1,000 to US$1,200 an ounce this year and may advance as high as US$1,500 after that, Mark Bristow, chief executive officer of Randgold Resources Ltd., said Monday in a television interview. Fourth-quarter profit more than tripled on surging gold prices, the company said Monday.

Metal holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, increased 1.83 metric tons to 1,106.38 tons on Feb. 5, according to figures on the company's Web site. Gold in ETF Securities Ltd.'s European and Australian exchange-traded products rose 1.2 percent to 7.803 million ounces on Feb. 5, its Web site showed. Silver for immediate delivery in London rose 0.7 percent to US$15.2725 an ounce. Platinum gained 0.6 percent to US$1,492 an ounce and palladium added 0.7 percent to US$407.13 an ounce.

Spot gold's relative strength index, a gauge of whether a commodity or security is overbought or oversold, plunged to 36.09 from 49.5 on Feb. 4 as bullion fell the most in 14 months.

The gauge approached the level of 30 that some investors and analysts who scrutinize technical charts view as a signal of an impending climb.

Subscribe to The China Post and save 25%. Click here

SharePrintEmail

Write a Comment

Terms

Enter your comments - 3000 characters max

Type in image code

Submit

 Receive China Post promos
 Respond to this email