SF: Gold Fluctuates in New York on Outlook for Dollar, Currencies
July 8 (Bloomberg) -- Gold futures fluctuated between gains and losses amid speculation that the dollar will weaken, boosting demand for the precious metal as an alternative asset.
The dollar slipped 0.1 percent against a basket of six major currencies, heading for the fifth straight weekly decline. Gold traditionally has moved inversely to the dollar. The metal reached a record $1,266.50 an ounce on June 21 and rallied to all-time highs in euros, sterling and Swiss francs as investors sought a haven during Europe's fiscal crisis.
"Gold is in transition," said Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago. "You have a more traditional gold and dollar relationship coming back, but it's very fragile."
Gold futures for August delivery rose $1.50, or 0.1 percent, to $1,200.40 at 9:10 a.m. on the Comex in New York. The price fell as much as 0.2 percent and rose as much as 0.8 percent.
A rally in equities may also boost demand for the precious metal, McGhee said. Gold dropped 3.9 percent last week as investors sold gold to cover losses in the stock market. The Standard & Poor's 500 Index lost 8.5 percent in the previous two weeks, before rebounding 3.7 percent this week through yesterday.
"If the relief rally in stocks holds, we'll see gold start moving higher," McGhee said. "If it doesn't last, we'll see people look to raise money again by selling gold."
Silver futures for September delivery rose 4 cents, or 0.2 percent, to $18.04 an ounce on the Comex.
Platinum futures for October delivery rose $9.80, or 0.6 percent, to $1,536.20 an ounce on the New York Mercantile Exchange. Palladium futures for September delivery rose $5.90, or 1.3 percent, to $448.25 an ounce.
