U.S. dollar weakens vs. major rivals, boosting the precious metal By Myra P. Saefong, MarketWatch LONDON (MarketWatch) — Gold futures resumed their run higher, hitting an intraday high of $1,362 an ounce on Wednesday, as weakness in the U.S. dollar spurred demand for the precious metal. Gold for December delivery (GCZ10 1,357, +10.70, +0.80%) rose $14.90 to $1,361.60 an ounce in electronic trading on Globex. Earlier in the session, the contract touched an intraday high of $1,362 an ounce. “Support is coming from a very weak U.S. dollar again, which plunged against the euro yesterday on publication of the minutes of the last Fed meeting,” said analysts at Commerzbank in a note to clients. “The minutes were interpreted by market players to mean that the Fed is highly likely to introduce new quantitative easing measures as soon as November,” they said. The dollar index (DXY 77.21, -0.15, -0.20%) , which tracks the performance of the greenback against a basket of other major currencies, fell to 77.023 from 77.375 late Tuesday in North American trading. The euro gained 0.5% to $1.3981. “Investment demand has become an essential component within the gold market, helping to sustain high prices in the face of an ever-widening gap between supply and fundamental sources of demand,” said Natixis Commodity Markets in a fourth-quarter metals review report released Monday. “While fears of recession, if not deflation persist, and while major central banks remain prepared to expand their balance sheets further through an additional round of quantitative easing, gold prices continue to be supported,” the report said. On Tuesday, gold for December delivery had fallen $7.70 to close at $1,346.70 in New York, as the dollar recouped some of its recent losses. See Tuesday’s metals column.

Source