Gold rose for the second day in Asia as a rally in crude oil prices and a decline in the dollar boosted demand for bullion as an inflation hedge.
The dollar fell against the euro and crude oil advanced more than 4% on speculation stimulus plans by China and other major economies may help sustain growth and demand for fuel. China yesterday said it will spend 4 trillion yuan through 2010 to prop up its economy, the biggest contributor to global growth.
''Gold is boosted by the outlook that all these money injections by governments will sooner or later come into the market,'' Ronald Leung, director, Lee Cheong Gold Dealers (Hong Kong), said today by phone from Hong Kong.
Bullion for immediate delivery rose 1.7% to $US749.38 an ounce at 9:23am in Singapore. Silver for immediate delivery was 1.8% higher at $US10.24 an ounce.
The Group of 20 nations is prepared to act ''urgently'' to bolster growth and called on governments to cut interest rates and raise spending as the world's leading industrialized economies battle the threat of a recession. The dollar fell for the first day in three against a weighted basket of six major currencies.
Australia's central bank signaled today that it's prepared to add to the most aggressive interest-rate cuts in 17 years. Taiwan's central bank yesterday cut its benchmark interest rate for the fourth time in two months.
December-delivery gold rallied 2.1% at $US749.30 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange.
Gold for October delivery in Tokyo jumped 2.6% at 2,387 yen a gram ($US749 an ounce) at 10:27am local time.
