By Pham-Duy Nguyen Dec. 17 (Bloomberg) -- Gold rose in New York, touching the highest price in more than two months, as the dollar weakened after the Federal Reserve cut borrowing costs, boosting the appeal of the precious metal as an alternative investment. The dollar fell for a sixth straight session, dropping as much as 1.7 percent against a weighted basket of six major currencies including the euro and yen. Yesterday, the Fed cut the benchmark rate from 1 percent to a target range of zero to 0.25 percent. Gold generally moves in the opposite direction of the dollar and is headed for an eighth straight annual gain. “These actions by the Fed are the exact thing that got us in trouble in the first place,” said Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois. “The dollar is doomed and gold can go to $1,200.” Gold futures for February delivery jumped $25.40, or 3 percent, to $868.10 an ounce at 9:48 a.m. on the Comex division of the New York Mercantile Exchange. Earlier, the price touched $871.30, the highest since Oct. 13. Gold reached a record $1,033.90 on March 17. Silver futures for March delivery climbed 57.5 cents, or 5.4 percent, to $11.28 an ounce on the Comex. To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

Source