Gold Advances for Second Day as Weakening Dollar May Fuel Investor Demand
By Claudia Carpenter – Mar 8, 2012 1:29 PM GMT+0000
Gold climbed for a second day in New York as a decline in the value of the dollar may signal more demand for precious metals.
The dollar fell for a second day against the euro as the European Central Bank kept interest rates on hold. Stocks and other commodities gained as Greece moved closer to completing its debt swap.
“Gold’s trading slightly higher today on a combination of a marginally weaker dollar and improved risk sentiment, which is seeing stronger equity and commodity prices,” said Matthew Turner, an analyst at Mitsubishi Corp. International (Europe) in London, by e-mail today. “While gold often moves in the opposite direction to other assets, due to its perceived safe- haven quality, its default position is in fact to move in line. That is happening today.”
Gold for delivery in April climbed 0.8 percent to $1,697.90 an ounce at 8:27 a.m. on the Comex in New York, after gaining 0.7 percent yesterday. Prices may climb to $2,100 this year, Turner said.
Bullion assets in exchange-traded products expanded for a sixth day yesterday to a record 2,407.021 metric tons, now valued at about $131 billion, according to data compiled by Bloomberg.
The possibility of a third quantitative easing from the U.S. central bank is the most important factor for gold’s next move, UBS AG said in an e-mailed report today. Gold’s response tomorrow to the U.S. jobs report “will act as a good barometer of the metal’s wider appeal,” Edel Tully, an analyst at UBS, said in the report.
Silver for May delivery climbed 1.3 percent to $34.015 an ounce, platinum for April delivery gained 0.9 percent to $1,641.20 an ounce and palladium for June delivery advanced 1.2 percent to $693.65 an ounce.
To contact the reporter on this story: Claudia Carpenter in London at email@example.com