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Wednesday, November 25, 2009
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Bloomberg.com
Gold climbed to a record for the third time this week as investors and central banks bought the metal to protect their wealth from the declining dollar.
Bullion for immediate delivery, which typically moves inversely to the dollar, reached a record $1,192.97 an ounce after the U.S. currency fell to a 15-month low yesterday against six major counterparts. Sri Lanka’s central bank paid about $375 million for 10 metric tons of gold it bought from the International Monetary Fund, the fund said yesterday.
“There is a lot of central-bank buying, hedge-fund buying and gold is obviously getting to $1,200 an ounce before the end of the year,” David Lee, a trader at Heraeus Precious Metals Management in New York, said yesterday. The metal has climbed 35 percent this year, heading for the sharpest annual increase since 1979.
Spot gold traded little changed at $1,191.68 an ounce at 7:16 a.m. Singapore time. February delivery gold reached a record $1,194.60 an ounce on the New York Mercantile Exchange’s Comex division. It traded at $1,193.50 at 7:17 a.m. Singapore time.
Gold extended gains yesterday on speculation India’s central bank may add to a 200 ton purchase it made last month. The country, the world’s largest gold consumer, may buy more from the IMF, the Financial Chronicle reported. Reserve Bank of India Governor Duvvuri Subbarao declined to comment on the report.
Sri Lanka’s purchase was the third sale this quarter of IMF bullion to a central bank, after India’s $6.7 billion purchase and the 2 tons Mauritius bought for $71.7 million. The sales leave about 190 tons remaining from the 403.3 tons the IMF announced Sept. 18 it would divest to shore up its finances.
Source: Bloomberg.com