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| Gold heads for biggest gain in three months |
| Bloomberg / Oct 01, 2009, 20:14 IST |
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Dollar’s fall makes investors see the metal as an alternative investment option.
Gold rose in London, heading for the biggest three-month gain in six quarters as the dollar slid, helping to boost demand for the metal as an alternative investment.
The Dollar Index, a six-currency gauge of the greenback’s strength, fell 2 per cent this month as an improving US economy spurred investment in higher-yielding assets. The country’s worst recession since the Great Depression eased in the second quarter and the economy is probably now in the early stages of recovery, economists said before reports today.
“The softer dollar has supported gold and will continue to provide direction in coming sessions as risk appetite fluctuates,” James Moore, an analyst at TheBullionDesk.com in London, said in a note. “The overall trend of improving economic indicators and inflation concerns looks set to push gold higher and ultimately challenge last year’s all-time high.”
Immediate-delivery bullion rose $10.13, or 1 per cent, to $1,002.53 an ounce by 11:45 am local time.
The precious metal is up 8.2 per cent this quarter, heading for the biggest climb since 2008’s first three months, and 5.4 per cent this month, the most since a 10 per cent advance in May. December gold futures were 0.9 per cent higher at $1,003.70 on the New York Mercantile Exchange’s Comex division.
Higher ‘fixing’
The metal climbed to $1,001.25 an ounce in the morning “fixing” in London, used by some mining companies to sell production, from $989.50 at yesterday’s afternoon fixing. Gold advanced to an 18-month high of $1,024.28 on September 17 and reached a record $1,032.70 in March 2008. The commodity is heading for a ninth annual gain.
The dollar index slipped as much as 0.8 per cent today before a report that economists said may show US gross domestic product contracted at the smallest rate in a year. A separate report may show job losses from companies are slowing.
Indian demand
Imports by India, the world’s biggest buyer, probably fell for a fifth month in September to 50 tonnes, from 54 tonnes a year earlier, as rising prices deterred jewellery buyers, said Harmesh Arora, vice president of the Bombay Bullion Association. Gold imports last month were 21.8 tonnes, compared with 98 tonnes a year earlier.
Among other precious metals, silver climbed 2 per cent to $16.4725 an ounce. Platinum added 1.7 per cent to $1,291 an ounce, and palladium rose 1.7 per cent to $291.85 an ounce. ETF Securities’ silver holdings added 0.1 per cent to a record 20.753 million ounces yesterday, while palladium holdings increased 0.1 per cent to a record 543,595 ounces.
Imports fall
Gold imports by India, the world’s biggest buyer, probably fell for the fifth month in September as rising prices deterred jewellery buyers, a traders’ group said. Overseas purchases may total 50 tonnes, compared with 54 tonnes a year ago, said Harmesh Arora, vice president of the Bombay Bullion Association, citing preliminary data. “The overall imports will still be less than last year as prices are still too high,” Arora said.
Gold touched $1,024.3 on September 17, the highest level since reaching a record in March last year, and is heading for a ninth straight annual gain.
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