Gold advanced to a four-week high in New York on speculation that a
decline in the dollar will spur demand for the metal as an alternative
investment. Silver also rallied.
The dollar fell as much as 1 percent against the euro
after Spain sold almost twice the planned amount of debt at an auction
today, boosting demand for the 17-nation currency. Gold usually moves in
the opposite direction to the dollar. The metal traded in euros has
climbed 7.5 percent this year, exceeding the 5.9 percent gain for metal
in the U.S. currency.
Gold in euros "is a good mirror of underlying gold
strength," Edel Tully, an analyst at UBS AG in London, said today in an
e-mailed report.
Gold futures for February delivery advanced 0.9 percent to $1,654.50
an ounce by 11:31 a.m. on the Comex in New York, after touching
$1,662.90, the highest since Dec. 13. In London, gold for immediate
delivery gained 0.7 percent to $1,654.03.
Holdings in exchange-traded products rose 0.5 percent
yesterday to 2,357.51 metric tons, a third straight gain, according to
data compiled by Bloomberg.
"That trend should continue," said Natalie Robertson, an analyst at Australia & New Zealand Banking Group Ltd. in Melbourne.
Bullion also gained after closing above its 200-day
moving average yesterday, according to UBS. Gold dropped below that
measure on Dec. 14 for the first time in almost three years.
Silver futures for March delivery rose 1.6 percent to
$30.37 an ounce on the Comex, after climbing to $30.675, the highest
level since Dec. 14.
On the New York Mercantile Exchange, platinum futures for
April delivery slipped 0.2 percent to $1,495.40 an ounce, erasing an
earlier gain of as much as 1 percent. Palladium futures for March
delivery fell 1.2 percent to $638.10 an ounce.
BLOOMBERG
