Gold climbed to a record for the second straight day on mounting concern that currencies will lose value, spurring demand for the metal to preserve wealth. Futures in New York reached $1,049.70 an ounce, the highest ever. Gold priced in euros, yen and pounds also gained. The dollar has slumped 5.9 percent against a basket of six major currencies since the end of 2008. The US has kept interest rates near zero, and government debt surged on spending aimed at ending the recession. “People are moving to gold as the asset of last resort,” said Philip Gotthelf, the president of Equidex Brokerage Group Inc. in Closter, New Jersey. “The printing of money and the abandonment of the dollar have taken the smart people over to precious metals.” Gold futures for December delivery rose $4.70, or 0.5 percent, to $1,044.40 an ounce on the Comex division of the New York Mercantile Exchange. The price is up 18 percent this year, heading for the ninth straight annual gain. The metal may reach $1,650 by early 2011, said commodity investor James Sinclair, who runs a website called JSMineSet. “The carry trade has dropped the dollar as a currency of choice,” Sinclair said Thursday in an interview on Bloomberg Radio. “Gold is competition to currencies.” Sinclair also is the chief executive officer of Surrey, British Columbia-based Tanzanian Royalty Exploration Corp. Unwinding bets Should gold for immediate delivery top $1,050, the metal may extend gains as investors unwind bets on falling prices, Frederic Panizzutti, a senior vice president for refiner MKS Finance SA, said in a telephone interview from Ho Chi Minh City, Vietnam. The dollar rose as much as 0.4 percent against the currency basket that includes the euro and the yen. The gain was the first in four sessions. The metal may be too expensive for some investors, and the dollar’s increase Thursday may limit further advances, said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. Gold for immediate delivery rose as much as $6.33, or 0.6 percent, to a record $1,048.43 Thursday. “Don’t expect gold to make new highs every day,” Lesh said. “There will be periods where the dollar will rebound off oversold conditions. There’s going to be people who are reluctant to buy at new highs, and they’ll wait for a pullback.” Silver futures for December delivery climbed 1.2 percent to $17.50 an ounce. The price has jumped 55 percent this year. Holdings of silver in the ETF Securities products rose 1.1 percent Wednesday to a record 20.97 million ounces.

Source