June 2 (Bloomberg) -- Gold rose in New York and London as the declining dollar increased the metal’s appeal as an alternative investment. Silver climbed to a nine-month high.
The U.S. Dollar Index, a six-currency gauge of the greenback’s value, fell as much as 1 percent today, heading for a fourth straight drop, on speculation that record U.S. borrowing will further weaken the dollar. Gold, which typically gains when the dollar falls, touched the highest in almost 14 weeks yesterday. Silver reached a nine-month high today.
Investors continue “to track moves in the dollar, the key factor driving gold,” Pradeep Unni, an analyst at Richcomm Global Services in Dubai, said in a note. “As optimism grows that the worst of the economic downturn is over,” gold and the dollar have resumed moving in opposite directions, Unni said.
Gold futures for August delivery rose $4.40, or 0.4 percent, to $984.40 an ounce on the New York Mercantile Exchange’s Comex division. Yesterday, the metal reached $990.20, the highest for a most-active contract since Feb. 24.
Bullion for immediate delivery in London jumped $5.97, or 0.6 percent, to $981.24 at 7:12 p.m. local time.
“Precious-metals markets are expected to continue their upward trends this week, with gold approaching $1,000 and silver $16,” Tom Pawlicki, an analyst at MF Global in Chicago, said today in a report. “Support will come from continued investment interest, the possibility of improving physical demand, and from growing tensions with North Korea.” more...
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