Gold Futures Climb on Dollar Weakness to Falling Stocks

London (Oct 20)  Gold futures rose as the dollar weakened and stocks declined, boosting demand for the metal.

The Bloomberg Dollar Index Spot fell 0.1 percent and the Stoxx Europe 600 index declined 0.6 percent as investors speculated on the timing of a Federal Reserve rate increase. Gold has advanced for the past two weeks, buoyed by a combination of a weakening dollar and falling stock prices.

“The combo of the two will give gold a boost,” Bernard Sin, global head of precious metals trading at MKS (Switzerland) SA in Geneva, said by e-mail.

Gold for December delivery climbed 0.2 percent to $1,241.90 an ounce by 6:42 a.m. on the Comex in New York. Prices may climb to $1,257 by the end of this week, Sin said.

Speculators raised their net-long bullish bet on gold futures for the first time in nine weeks as of Oct. 14, according to U.S. Commodity Futures Trading Commission data. The 39 percent jump was the biggest gain since June 24 and first increase since mid August.

“This scenario continues to be supportive for gold, as it allows for more room to rebuild positions in the near term should investor doubts on global growth and uncertainties on the timing of Fed rate hikes linger,” Joni Teves, an analyst at UBS AG in London, said in an e-mailed report today.

Silver climbed 0.3 percent to $17.385 an ounce.

Source: Bloomberg