Capital Gold Group Report: Gold Climbs to $915 on Declining US Dollar and Rising Oil Prices
SAN FRANCISCO (MarketWatch) -- Gold futures climbed to $915 an ounce Tuesday to trade at their strongest levels in a month as a decline in the U.S. dollar and rising oil prices enhanced the metal's appeal as an investment hedge.
Gold for June delivery climbed as high as $915 an ounce on the New York
Mercantile Exchange, a level not seen since April 22. It was last up
$8.40, or 0.9%, at $914.20.
June gold climbed as high as $915.70 an ounce in electronic trading.
The contract was ready to mark a fourth-straight session of gains. It's
already climbed by more than $39, or 4.5%, over the last three trading
days.
"The
continued gains being made in the energy sector, and the
anti-inflationary hedging this is creating," is likely to see gold
extend higher, said James Moore, an analyst at TheBullionDesk.com, in a
research note.
Crude-oil futures
rallied Tuesday, touching a high of $129.45 a barrel in New York, as
weakness in the U.S. dollar underpinned oil prices.
In the currency markets, the U.S. dollar fell against its major rivals
on higher inflation in Germany and tamer U.S. inflation. The dollar
index, which tracks the performance of the greenback against other
currencies, fell to 72.502 from 73.059 in late North American trading
Monday.
Weakness in the U.S.
dollar typically benefits dollar-denominated commodities, such as gold
and crude oil, because it makes them cheaper for holders of other
currencies.
Year to date, gold is up nearly 9% -- unlike most equity markets, said
Mark O'Byrne, a director of Gold and Silver Investments Ltd., in a note
to clients. And "in the last 12 months, gold is up 37%, and thus
corrections are healthy and to be expected."
Also on the Nymex, July
silver gained 25 cents at $17.28 an ounce. It's trading at its
strongest level since late April. July copper futures fell was down 1
cent to $3.77 a pound.
July platinum fell $3.60 to $2,154.60 an ounce and June palladium shed $5.85 to $445.50 an ounce.
Global platinum supplies weren't enough to meet demand in 2007,
platinum group metals refiner Johnson Matthey said Monday in its annual
industry review report. But supplies of palladium were more than enough
to meet demand. . . .
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