TOKYO, June 1 (Reuters) - Gold hit a three-month high on
Monday, helped by a weak dollar and concerns about rising prices
after governments around the world boosted spending to try to
rescue their economies from the global financial meltdown.
Other commodities such as oil have also extended gains on a
brighter economic outlook, another reason fanning fears of a
medium- to long-term inflation, traders said.
Gold market reaction was muted to news that General Motors
Corp (GM.N: Quote, Profile, Research) will file for bankruptcy protection on Monday, as
traders said this had been widely anticipated. [ID:nCARS1]
Spot gold rose 0.5 percent to $983.10 per ounce, its
highest since late February, from New York's notional close of
$978.20 on Friday, adding to a rise of more than $20 last week.
U.S. gold futures for August delivery GCQ9 inched up 0.5
percent to a three-month high of $984.90 per ounce, from $980.30
an ounce on the COMEX division of the New York Mercantile
Exchange.
"Gold is rising because the dollar is weak, the economy is
stabilising, and interest rates are low," said Ronald Leung,
director of Lee Cheong Gold Dealers in Hong Kong.
"There is too much hot money around as governments are
printing money, and one option is to put that into stocks and the
other is to gold," he said, adding that it was just a matter of
timing before gold prices rose above a key $1,000 mark.
"People think it's just a matter of time that inflation will
come," Leung said.
Gold rose to $1005.40 on February 20, its highest since a
record peak of $1,030.80 in March 2008.
The dollar edged up against the euro after dropping steeply
on Friday. The dollar had hit a five-month low against a basket
of major currencies as investors bought higher-yielding
currencies and assets on hopes for a global economic recovery.
The dollar fell 0.5 percent against the yen. [USD/]
The dollar's weakness has supported gold as investors view
gold as insurance against the falling value of dollar-denominated
portfolios.
Speculators boosted their holdings of U.S. gold futures, with
noncommercial investors net long on 177,308 contracts of gold
futures in the week to May 26, compared with a net long 149,584
contracts in the week to May 19. [ID:nN29434339]
Investment flows into the world's largest gold-backed
exchange-traded fund, the SPDR Gold Trust GLD, remained
unchanged since May 22. [GOL/SPDR]
"People have already invested enough in the ETF," Leung said.
Precious metals prices at 0228 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 982.30 4.10 +0.42 11.61
Spot Silver 15.81 0.07 +0.44 39.66
Spot Platinum 1203.00 16.00 +1.35 29.08
Spot Palladium 235.00 1.00 +0.43 27.37
TOCOM Gold 3008.00 -11.00 -0.36 16.91 35936
TOCOM Platinum 3696.00 57.00 +1.57 39.37 10209
TOCOM Silver 479.50 5.80 +1.22 50.17 275
TOCOM Palladium 730.00 2.00 +0.27 32.73 193
Euro/Dollar 1.4160
Dollar/Yen 94.80
TOCOM prices in yen per gram, except TOCOM silver which is priced
in yen per 10 grams. Spot prices in $ per ounce.
