Gold rose for a sixth day and reached a four-month high as a drop in the dollar spurred demand for bullion as an alternative investment.
The dollar fell as much as 1.2 per cent against a basket of six currencies including the euro, which climbed for a third day after European governments offered Greece a rescue package worth as much as 45 billion euros ($US61 billion) at below-market interest rates. Investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, climbed to a record on April 9.
''The dollar is falling as risks in the European zone are being eased,'' said Chris Yoo, head of global derivatives at Samsung Futures in Seoul. ''The euro is surging now and gold is gaining too.''
Gold for immediate delivery rose as much as 0.7 per cent to $US1170 an ounce, the highest level since December 4, and was at $US1165.45 in Seoul. The June-delivery contract in New York rose as much as 0.8 per cent to $US1170.70 an ounce and was last at $US1166.40. Futures rallied 3.2 per cent last week, the most since February 12.
Forced into action by a surge in Greek borrowing costs to an 11-year high, euro-region finance ministers said yesterday they would offer as much as 30 billion euros in three-year loans in 2010 at about 5 per cent. That's less than the current three-year Greek bond yield of 6.98 per cent. Another 15 billion euros would come from the International Monetary Fund.
Bullion holdings
Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by the metal, rose 0.61 metric ton to a record 1141.04 tons, according to the company’s web site. The amount increased 1 per cent last week as gold prices rallied on demand for a haven against currency investment.
Platinum for immediate delivery gained as much as 0.9 per cent to $US1738.75 an ounce, the highest level since August 1 2008 before trading at $US1735.50 an ounce. Silver for immediate delivery advanced 0.7 per cent to $US18.5425 an ounce.
