Gold Rises on Dollar’s Drop...Gold Rises on Dollar’s Drop, Commodity Rally; Silver Gains
By Pham-Duy Nguyen
Dec. 10 (Bloomberg) -- Gold futures rose for the thirdconsecutive day on speculation a weaker dollar and highercommodity costs will boost demand for the precious metal as ahedge against inflation. Silver also gained.
The dollar fell for the second time in three days against aweighted basket of six major currencies. The Reuters/JefferiesCRB Index of 19 raw materials climbed as much as 0.8 percent.Gold reached a record in March as the CRB headed to an all-timehigh in July and the dollar fell to a record against the euro.
“People are getting more concerned about inflation downthe road,” said Matt Zeman, a metals trader at LaSalle FuturesGroup in Chicago. “If the government keeps on spending andinterest rates stay low, it’s going to come back and bite us. Ifthe dollar heads lower, that’ll be the stimulus gold needs toput together a nice run.”
Gold futures for February delivery rose $28.20, or 3.6percent, to $802.40 an ounce at 9:10 a.m. on the Comex divisionof the New York Mercantile Exchange. The price gained 2.9percent in the previous two days.
Silver futures for March delivery climbed 34 cents, or 3.5percent, to $10.19 an ounce.
Before today, gold dropped 7.6 percent this year, whilesilver was down 34 percent. Gold climbed to a record $1,033.90on March 17.