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Wednesday, December 30, 2009
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Bloomberg.com
Gold gained, heading for its ninth straight annual advance, as speculation that the dollar will weaken next year attracted investors.
“The overall trend of dollar weakness should continue into next year, providing incentives to gold investors,” Chris Yoo, head of global derivatives with Samsung Futures Co., said in Seoul. “Gold remains in investors’ favor until the U.S. raises interest rates after signs of global recovery become more pronounced.”
Bullion climbed to an all-time high of $1,226.56 an ounce on Dec. 3 as central banks, pension funds and individuals stepped up purchases to protect their wealth against currency debasement and inflation. Gold, which typically moves inversely to the dollar, has climbed 24 percent in 2009 as the Dollar Index, a six-currency gauge of the greenback’s value, dropped 4.2 percent.
Gold for immediate delivery increased 0.2 percent to $1,094.82 an ounce at 8:32 a.m. in Singapore. Gold for February delivery in New York advanced 0.3 percent to $1,095.20 an ounce. Spot gold prices have jumped almost threefold this decade.
The precious metal declined 7.3 percent in December, dropping for the first time in four months as the dollar rebounded from a 15-month low against major global currencies.
The Federal Reserve has kept benchmark interest rates close to zero since December 2008 to spur growth after the worst financial crisis since World War II. Investors poured about $15.8 billion into commodity funds this year through Dec. 2, according to fund-flow researcher EPFR Global, as the appeal of raw materials grew on signs that the economy is recovering.
The Reuters/Jefferies CRB Index of 19 raw materials has jumped 23.6 percent this year, heading for the biggest gain since 1979, after slumping 36 percent in 2008.
Among other precious metals for immediate delivery, platinum gained 0.8 percent to $1,457.50 an ounce, and silver added 0.3 percent to $16.86 an ounce and palladium climbed 0.2 percent to $394.63 an ounce.
Source: Bloomberg.com