Gold rose to a four-week high on speculation that the dollar will slump, boosting the allure of the precious metal as an alternative asset. Palladium and platinum futures surged to the highest levels since 2008.
The greenback fell as much as 0.5 per cent against a basket of major currencies after rallying 4.1 per cent in the first quarter. Gold gained 24 per cent in 2009 as record-low borrowing costs sent the dollar down 4.2 per cent. Last month, the Federal Reserve affirmed that its benchmark lending rate will be zero to 0.25 per cent for an "extended" period.
"Low interest rates may be an attraction to gold," said Tom Pawlicki, an analyst at MF Global Holdings Ltd. in Chicago. "The upward trend in gold prices that was in place late last year may resume, on the theory that low rates will create inflation down the road."
Gold futures for June delivery rose $US7.70 or 0.7 per cent, to $US1133.80 an ounce on the Comex in New York. Earlier, the metal reached $US1134.30, the highest level for a most-active contract since March 8.
The Reuters/Jefferies CRB Index of 19 raw materials rose to a 10-week high after a government report showed US employers added the most jobs in three years.
"Recent data suggest the recovery that began last year has momentum and is broadening, not faltering," said Michael Darda, the chief economist at MKM Partners LP in Greenwich, Connecticut. "We continue to expect private-sector job gains to surprise to the upside and the Fed to remain on the sidelines for most, if not all, of 2010."
