Post by
PGMBOY on Mar 20, 2007 10:20am
Gold Climbs Demand for Alternative to the $
Gold Climbs on Demand for Alternative Investment to the Dollar
By Claudia Carpenter
March 20 (Bloomberg) -- Gold advanced for a fifth consecutive day in London on speculation the dollar will resume its decline against the euro, increasing demand for the precious metal as an alternative investment.
Bullion has climbed 2.6 percent this year, while the dollar last week fell to a three-month low against the euro. The Federal Reserve is set to decide on interest rates tomorrow. Immediately after the Fed's meeting in January, rates were left unchanged and gold climbed $5.90, or 0.9 percent.
``People are expecting no change in rates, which means it will be bullish for gold,'' said Bernard Sin, chief trader at gold refiner MKS Finance SA in Geneva.
Gold for immediate delivery rose $1.70, or 0.3 percent, to $655.90 an ounce at 11:39 a.m. in London. The metal may climb to $700 this month, Sin said.
Options on Fed Fund futures at the Chicago Board of Trade show a 24 percent likelihood the bank will lower its target rate for overnight loans to 4.5 percent by the end of this year, from 5.25 percent now. A rate cut may weaken the dollar, which fell 1.3 percent against a basket of six major currencies last week as gold climbed 0.5 percent.
Silver gained 9.5 cents to $13.27 an ounce. Platinum declined $2 to $1,227 and palladium fell $1.50 to $351.
To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net .
Last Updated: March 20, 2007 07:40 EDT