By Pham-Duy Nguyen
March 31 (Bloomberg) — Gold rose in New York, heading for a second straight quarterly gain, on speculation that a weaker dollar will boost the metal’s appeal as an alternative asset. Silver fell.
The U.S. Dollar Index, a six-currency gauge, fell as much as 0.9 percent, halting a three-session rally. Gold and the dollar are inversely correlated. . .
“For investors who are concerned about the long-term prospects of the U.S. dollar, gold may be attractive,” John Reade, a UBS AG metals strategist, said today in a report. “In an environment where the reserve currency of the world could become shunned, gold could do extraordinarily well.” Gold futures for June delivery rose $2.80, or 0.3 percent, to $920.50 an ounce at 11:27 a.m. on the New York Mercantile Exchange’s Comex division. The most-active contract is up 4 percent this quarter, which would be the biggest quarterly gain in a year.
Silver futures for May delivery fell 19.8 cents, or 1.5 percent, to $12.835 an ounce in New York. The price has jumped 14 percent this year, which would also be the biggest quarterly gain in a year.
Gold and the dollar usually move in the opposite direction. Gold has posted gains every year since 2001, and the dollar has only risen in three of those years.
Investors may also purchase gold as central bank policies to ease borrowing costs devalue currencies, analysts said. Gold priced in euros and pounds reached records in February. Gold futures rose to an all-time high of $1,033.90 on March 17, 2008 and reached $1,007.70, the highest this year, on Feb. 20. . . .