RTRS: PRECIOUS-Gold returns to near record high as dollar drops
By Lewa Pardomuan
SINGAPORE, Nov 3 (Reuters) - Gold rose towards last month's record on Tuesday as the dollar slipped ahead of a U.S. interest rate decision, and on news the IMF had completed half of a planned gold sale.
The International Monetary Fund said on Monday it sold 200 tonnes of gold to the Reserve Bank of India for $6.8 billion, quietly executing half of a long-planned bullion sale that had threatened to slow gold's rally. [ID:nN02468120]
Spot gold was quoted at $1,064.70 an ounce at 0304 GMT, up $5.55 from New York's notional close. It hit a near two-week high of $1,066.15, within sight of a lifetime high of $1,070.40 struck on Oct. 14.
"The fact that they've sold the gold to India would suggest there's going to be fewer official sales by the IMF on the market. So that might be a positive theme for the gold price," said David Moore, commodities strategist at Commonwealth Bank of Australia.
The IMF sale is part of an agreement struck earlier this year among IMF member countries to sell 403.3 tonnes of the body's gold stocks to diversify the Fund's sources of income and to increase low-cost lending to poor countries.
U.S. gold futures for December delivery added $11.6 an ounce at $1,065.60 on the COMEX division of the New York Mercantile Exchange, within sight of last month's record of $1,072 an ounce.
"We used to think it was all dollar related but gold seems to behaving by itself, helped by a couple of encouraging reports on central bank activity," said Commodity Broking Services' Chief Executive Jonathan Barratt.
"I think if it takes out that $1,070 to $1,071 range then I am quite happy to add positions," he added.
The U.S. dollar and the yen edged down in thin trade on Tuesday ahead of a series of central bank meetings on interest rates. The euro edged up to $1.4775, having gained 0.35 percent on Monday. [USD/]
The U.S. Federal Reserve starts its two-day meeting on Tuesday and, while it is expected to keep rates unchanged, there is speculation that it might drop or alter its pledge to keep rates low for an "extended period". [nFEDAHEAD].
Persistent weakness in the dollar had spurred fund buying of gold, which sent cash and futures to record highs last month. Gold is seen as a hedge against both inflation and a depreciating dollar.
