AFP: Gold rises as weaker dollar spurs appeal as alternative investment
LONDON -- Gold rose for the first time in three days in London as a weakening dollar increased the metal's appeal as an alternative investment. Palladium climbed to a 25- month high.
The dollar fell for a fifth day against the euro, sliding as much as 0.4 percent. Gold, which typically moves inversely to the greenback, climbed to a four-month high of US$1,170 an ounce on April 12 as the U.S. currency fell to a three-week low. “People are looking for short-term direction, and currencies will be back as a driver” of gold prices, said Wolfgang Wrzesniok-Rossbach, head of sales and marketing at Hanau, Germany-based Heraeus Metallhandels GmbH. Investors “are looking at the instability of the financial system with regard to debt problems,” weakening gold's correlation with the dollar, he said.
Gold for immediate delivery added US$6.96, or 0.6 percent, to US$1,157.61 an ounce at 11:34 a.m. local time. Prices rose in the first quarter even as the dollar strengthened against the euro, the second quarter in a row that both the metal and the U.S. currency advanced.
Bullion for June delivery was 0.4 percent higher at US$1,158.30 on the Comex in New York.
