Gold touches fresh high even as dollar rises
NEW YORK — Gold prices extended their rally Wednesday, climbing to fresh highs even as the dollar recouped some of its losses.
Oil prices fell after a government report showing an oversupply of gasoline, while grain prices rose.
On the New York Mercantile Exchange, gold for December delivery touched a new all-time high of $1,049.70 an ounce, before settling up $4.70 at $1,044.40 an ounce. Gold has risen 5.3 percent in less than two weeks, bringing its year-to-date gain to 18.1 percent.
Investors have been sending gold higher as the dollar declines, fearing a weak greenback will eventually lead to inflation. There is also some doubt about the dollar’s role as the world’s chief currency. Gold is often used as a hedge against inflation and a falling dollar.
Gold prices surged Tuesday, taking out their previous all-time high of $1,033, as the dollar tumbled following an interest rate hike in Australia. Higher interest rates can make a country’s currency more attractive.
Gold continued to rise Wednesday even though the dollar rebounded slightly against the euro and the British pound, a sign to some that the rally in gold may be somewhat inflated, being fed by its own gains more than fundamentals.
“This remains a momentum fund-driven spectacle,” wrote Jon Nadler, senior analyst at Kitco Metals Inc., in a research note Wednesday. He still expects gold to move higher in the near term.
“There would appear to be little standing in the way of a further push to $1,080 at this juncture,” he said.
Other precious metals followed gold higher. December silver jumped 20.5 cents to $17.50 an ounce, while October platinum inched up $2.40 to $1,320.50 an ounce.
December copper futures slipped half a cent to $2.7795 a pound.
Government data showing a surprising decline in weekly crude supplies did little to boost oil prices Wednesday. Instead, traders focused on the part of the report showing a bigger-than-expected increase in gasoline supplies — a sign that Americans’ energy consumption is still lagging.
Light, sweet crude for November delivery dropped $1.31 to settle at $69.57 a barrel.
In other Nymex trading, gasoline for November delivery lost 5.24 cents to $1.7203 per gallon, and heating oil gave up 3.31 cents to $1.7811 a gallon.
Grain prices rose slightly on the Chicago Board of Trade.
December wheat futures gained 3 cents to $4.6325 a bushel, while corn for December delivery added 1.5 cents to $3.5975 a bushel.
November soybeans rose 2 cents to $9.12 a bushel.
Sugar and cotton prices fell, while orange juice, coffee and cocoa rose.
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October 8th, 2009 at 12:42 pm
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