MW: Gold at five-week high on dollar, safe-haven buying
By Moming Zhou, MarketWatch
NEW YORK (MarketWatch) -- Gold futures rose for a fourth consecutive session Monday, surging to their highest in more than five weeks amid broad rallies in stocks and commodities, as safe-haven buying and the dollar's decline continued.
Gold's gains came as U.S. equity markets jumped and as crude oil and other metals surged. Silver leaped past $10 an ounce for the first time in two weeks.
Gold for December delivery rose $35.50, or 4.5%, to $827.30 an ounce on the Comex division of the New York Mercantile Exchange. It rose as high as $830 earlier, the loftiest intraday level since Oct. 16. The metal has gained nearly $95, or 13%, since Nov. 18.
Gold rallied more than $40 on Friday alone, capping off a rise of 6.6% for the week -- the biggest percentage gain since the week ended Sept. 19.
There was more gloomy news on the economic front to start the week, this time in Germany. A closely watched gauge of business sentiment in Europe's biggest economy plummeted to its lowest level in 15 years in November. See full story.
Late Sunday, the U.S. government agreed to extend Citigroup a $326 billion rescue plan designed to avoid financial collapse. Stocks surged Monday, with the Dow Jones Industrial Average up more than 300. See full story.
"Dollar weakness and oil strength are contributory factors that drove gold higher, but safe-haven buying looks to be a primary cause," said Mark O'Byrne, executive director at Gold & Silver Investments.
In foreign-exchange trading, the dollar index , which tracks the value of the greenback against its major rivals, lost 1.4%. A falling dollar increases gold's investment appeal. See Currencies.
In Monday's energy action, crude-oil futures rose more than 4%, moving above $52 a barrel. Higher oil prices tend to increase gold's appeal as a hedge against inflation. See Futures Movers.
Despite recent rallies, gold futures are still about 17% below their record above $1,000, hit in March. It slumped 18% in October, the biggest monthly loss since 1983. As safe-haven investment demand returns, some analysts believe gold's destined to rise further.
"Momentum players are likely to be as ever making the trend their friend," said O'Byrne. "We are likely seeing more short covering as hedge funds and institutions may realize that the worst of the deleveraging is over."
In gold spot trading, the London gold-fixing price -- used as a benchmark for gold for immediate delivery -- stood at $822.50 an ounce Monday afternoon, up $48 from Friday afternoon.
Holdings in the SPDR Gold Trust , the largest gold exchange-traded fund, stood at 755.06 tons on Friday, up 3.06 from a day ago, according to the latest data from the fund.
Rounding out the early Comex action, December silver jumped 12% to $10.665 an ounce, rising to above $10 for the first time since Nov. 10.
December palladium rallied 9.7% to $196.20 an ounce, and January platinum added 5.7% to $873 an ounce. December copper also spiked higher, adding 8.9% to $1.7195 a pound.
