RTRS: Gold rises near $1,070 as dollar hits 14-month lows
By Chikako Mogi
TOKYO (Reuters) - Gold rose closer to last week's record highs above $1,070 an ounce on Tuesday, as the dollar fell to a 14-month low against a basket of six major currencies, helping bullion maintain its appeal as a currency alternative.
Record speculative net long futures positions, weak physical demand and scrap hitting the markets as prices hover near record peaks are slowing gold's climb back to their highs.
But market expectations for U.S. interest rates to stay near zero for several more months continue to weigh on the greenback, whose weakness makes bullion less expensive for holders of other currencies.
"Since there is no sign in sight of a turnaround in the dollar's weakness, investors are holding onto their long positions in gold, even when there is wariness about current high prices being not really justifiable," said Wakako Harada, senior trader at Mitsubishi Corp.
"Prices are driven by option-related positions, by a very small group of investors playing large lots, and by a very thin market," she said. "Traders are just left behind."
Spot gold was at $1,066.45 per ounce at 0300 GMT (11 p.m. EDT on Monday), up 0.5 percent from $1,060.70 in late New York trade on Monday.
U.S. gold futures for December delivery were at $1,067.7 per ounce, up nearly 1 percent from $1,058.10 in the COMEX division of the New York Mercantile Exchange.
Last week, spot gold soared to an all-time high of $1,070.40 an ounce, while New York gold futures hit a record peak of $1,072 on the greenback's weakness.
