Gold advanced to a record as prospects for a further decline in the dollar boosted investor demand for precious metals as alternative holdings. Silver climbed to the highest price in 30 years. Gold for immediate delivery rose as much as 0.3 percent to $1,300.15 an ounce before trading at $1,299.32 at 3:31 p.m. in Seoul. Bullion surpassed the peak of $1,300.07 that was reached on Sept. 24. Immediate-delivery silver advanced as much as 0.8 percent to $21.6075 an ounce, the highest level since 1980. “The probability that the Federal Reserve may implement a second round of quantitative easing keeps boosting gold,” C.H. Oh, head of overseas futures at Seoul-based NH Investment & Futures, said before the metal set today’s all-time high. “Silver is rising in tandem.” The dollar traded near a five-month low versus the euro as expectations the U.S. economy will slow added to speculation that the Fed will ease monetary policy. The Dollar Index, a six- currency gauge of the dollar’s value, fell to 79.255, matching the level on Sept. 24, which was the lowest since Feb. 3. Precious metals have gained this year as central banks and governments maintained low borrowing costs and spent trillions of dollars to stimulate their economies. The dollar slipped to a five-month low against the euro on Sept. 22 after the Fed left its benchmark interest-rate target at a record low and pledged to take more steps to spur growth if necessary. ‘Back Foot’ “We will see the U.S. dollar remain on the back foot,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “There’s ongoing speculation that we will see further quantitative easing.” Gold is heading for a 10th annual gain, the longest winning run since at least 1920. Prices have gained this year even as U.S. inflation slowed. Bullion is traditionally bought as a hedge against rising consumer prices. Inflation expectations, based on the 10-year U.S. Treasury breakeven rate, have fallen to 1.83 percent from 2.25 percent six months ago. “There are good chances gold prices will rise further in U.S. dollar terms,” Tobias Merath, head of commodities research at Credit Suisse Group AG, wrote in a report dated today. “The U.S. dollar is weakening and there’s talk about a potential second round of quantitative easing in the U.S.” An ounce of gold bought as little as 60.1227 ounces of silver today, the least since October last year, according to Bloomberg data. The ratio fell as low as about 43.57 in 2006 and has averaged about 61.79 this century. Europe’s central banks sold 6.2 metric tons of gold in the year to yesterday, 96 percent less than the previous year, the Financial Times said today, citing data from the Central Bank Gold Agreement. Sales are the lowest since the accord was signed by euro-region central banks, Sweden and Switzerland in 1999, the FT said. Platinum for immediate delivery was little changed at $1,643 an ounce after reaching $1,649.75 on Sept. 24, the highest price since May 19. Palladium climbed as much as 0.8 percent to $564 an ounce, the highest price since April. To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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