Gold Rises for Sixth Straight Session on Bets Dollar to Drop
NEW YORK (Nov 20) Gold prices climbed for the sixth straight session on speculation that the dollar will decline, boosting demand for the metal as an alternative investment.
The dollar touched a 15-month low against a basket of major currencies on Nov. 16. The greenback climbed as much as 0.8 percent today. Gold reached a record $1,153.40 an ounce on Nov. 18 and has fallen only once this month.
“People are still buying gold because they think the dollar hasn’t been broken yet,” said Marty McNeill, a trader at R.F. Lafferty Inc. in New York. “If the dollar rallies, it’s an excuse to sell for profit. Any dip in prices is a buying opportunity.”
Gold futures for December delivery rose $2.30, or 0.2 percent, to $1,144.20 at 12:33 p.m. on the Comex division of the New York Mercantile Exchange. Earlier, the price dropped as much as 0.8 percent. The metal gained 3.2 percent in the previous five sessions. In November, the price has climbed more than $100.
The popularity of exchange-traded funds backed by gold may diminish the historic inverse correlation between the dollar and the metal during times of financial turmoil, Deutsche Bank AG said in a report today.
Investors have poured $55.5 billion into gold ETFs in the nine months ended Sept. 30, Jason Toussaint, the World Gold Council’s managing director of ETFs, said this week. SPDR Gold Trust, the biggest bullion-backed ETF, has almost 1,118 metric tons, or more than China’s reserves.
Correlation ‘Fade’
“The gold price should not fear a new long-term uptrend in the dollar,” Deutsche Bank said. “In periods of risk aversion which lead to a strengthening dollar and strong inflows into gold ETFs, the strong correlation may start to fade.”
China ranks sixth among official holders with 1,054 tons, according to data from the producer-funded council. The U.S. is the largest.
Silver futures for December delivery fell 6.5 cents, or 0.4 percent, to $18.39 an ounce in New York. Platinum for January delivery fell 50 cents to $1,443.40 an ounce. Palladium for December delivery declined $4.90, or 1.3 percent, to $365 an ounce.
