BLBG: Gold Climbs as Dollar Drops, Pares Biggest Fall in Two Months
Gold advanced, paring the biggest decline in almost two months yesterday, as a drop in the dollar increased demand for the metal as an alternative investment. Silver was little changed.
Bullion rose as much as 0.6 percent as a recovery in the currency stalled. The U.S. Dollar Index, a six-currency gauge of the greenback’s value, gained 1.4 percent yesterday, the biggest jump in more than four months. Gold typically moves in the opposite direction to the dollar.
“The U.S. dollar has just dropped a little bit today, but nothing too significant, and the gold price has risen in reflection of that,” Jamie Spiteri, head dealer at Shaw Stockbroking Ltd. in Sydney, said by phone.
Gold for immediate delivery advanced 0.4 percent to $966.61 an ounce at 1:21 p.m. in Singapore, trading between $961.92 and $968.85. The metal declined 1.9 percent yesterday, the largest drop since April 6.
“I suspect that today it will hover at around that $965 level,” Spiteri said. “I can’t see it reaching $1,000 this week, but it’s not too far away,” he said.
Silver for immediate delivery was little changed at $15.3325 an ounce after tumbling 3.9 percent yesterday.
The U.S. Dollar Index fell as much as 0.3 percent to 79.288 today before trading at 79.534 by 1:01 p.m. in Singapore. The index gained 1.4 percent yesterday, the most since Jan. 20, after touching 78.334 on June 2, the lowest since Dec. 18.
Outpacing Gold
Silver has outpaced gold this year. An ounce of gold now buys about 63 ounces of silver, according to data compiled by Bloomberg. This is down from a high of 84.4 on Oct. 10, which was the most since March 1995.
Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, yesterday decreased 1.53 metric tons to 1,132.50 tons, dropping from a record 1,134.03 tons, the company’s Web site showed.
Gold for August delivery, the most-active contract on the Comex division of the New York Mercantile Exchange, advanced 0.2 percent at $967.30.
Among other precious metals for immediate delivery, platinum fell 0.3 percent to $1,235.50 an ounce. Palladium, down 2.9 percent yesterday, fell 0.6 percent to $242 an ounce.
