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Gold Futures Rise for First Time in Three Days as Dollar Drops

Monday, 15 Aug 2011 03:22 PM

Gold futures gained for the first time in three sessions as the dollar’s decline revived demand for the metal as an alternative investment.

The greenback headed for the biggest drop in three weeks against a basket of six currencies. Gold climbed to a record $1,817.60 an ounce on Aug. 11 as escalating debt woes in the U.S. and Europe drove global stocks markets lower. Credit risk fell today, and equities climbed.

“The weaker dollar is definitely providing some support” to gold, Matthew Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. “The market will likely remain rangebound as people are returning to equities because of positive economic numbers.”

Gold futures for December delivery rose $15.40, or 0.9 percent, to settle at $1,758 at 1:39 p.m. on the Comex in New York. The price fell 2.3 percent in the previous two sessions. The metal has jumped 45 percent in the past year.

The MSCI All-Country World Index of equities climbed for the third straight session after a report showed Japan’s economy shrank less than forecast. U.S. retail sales rose the most in four months in July, while applications for jobless benefits were the lowest since April, reports last week showed,

Global equities plunged last week to the lowest since September after Standard & Poor’s lowered its credit rating for the U.S. from AAA, stoking concern that the global economic recovery may be at risk.

Gold ‘Standout’

The “uncertainty in financial markets, whether from the growth outlook or the ongoing sovereign-debt crisis, is expected to remain a benefit to perceived safe-haven commodity assets, of which we believe gold is the standout,” Morgan Stanley analysts, led by Hussein Allidina in New York, said today in a report.

Silver futures for September delivery rose 19.3 cents, or 0.5 percent, to $39.307 an ounce on the Comex.

On the New York Mercantile Exchange, palladium futures for September delivery fell $1.85, or 0.2 percent, to $746.35 an ounce. Platinum futures for October delivery climbed 50 cents to $1,797.20 an ounce.

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Gold futures gained for the first time in three sessions as the dollar s decline revived demand for the metal as an alternative investment.The greenback headed for the biggest drop in three weeks against a basket of six currencies. Gold climbed to a record $1,817.60 an...
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