Gold climbed to a record in New York and London as a weaker dollar prompted investors to buy bullion as an alternative investment.
The dollar slumped as much as 1.1% against a basket of six major currencies after the Group of 20 governments agreed to keep stimulus measures and remained silent on the greenback’s decline this year. Gold futures jumped 5.6% in the past month as the Dollar Index slipped 1.7% and as news last week of an Indian government bullion purchase raised speculation that other countries would follow suit.
December gold futures added as much as 16, or 1.5%, to 1,111.70 an ounce on the New York Mercantile Exchange’s Comex division and were at 1,107.90 by 8:40 a.m. local time. Immediate-delivery bullion gained as much as 1.5% to 1,111.20 in London and last traded at 1,106.85.
The metal climbed to a record 1,108.50 an ounce in the morning “fixing” in London from 1,096.75 at the afternoon fixing on Nov. 6. Some mining companies use fixings to sell production. Spot prices advanced 4.8% last week, the biggest gain since April.
The Dollar Index, a measure of the greenback against the euro and five other currencies, fell to a two-week low today. The index tumbled 7.6% this year, fueling a 25% rally in gold futures. It slipped last week as Federal Reserve officials left interest rates near zero.
June-delivery gold in Shanghai gained as much as 1.4% to 242.26 yuan a gram (1,104 an ounce), the highest price since futures started trading in January 2008.
India’s central bank last month bought 200 metric tons of bullion from the International Monetary Fund for 6.7 billion. The country now holds 557.7 tons in its reserves, the 10th- largest stockpile by nation after Russia’s 568.4 tons, according to data from the producer-funded World Gold Council. The IMF agreed in September to sell 403.3 tons of gold as part of a plan to shore up its finances.
Hedge funds and other large speculators in gold futures trimmed net-long positions, or bets on higher prices, by 458 contracts as of Nov. 3 from the previous week, Commodity Futures Trading Commission data show. The 14-day relative strength index for gold futures climbed to 73.4 today, above the level of 70 viewed by some investors as a signal for an impending retreat.
Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were unchanged at 1,108.34 tons as of Nov. 6, figures on the company’s Web site showed. Gold held in ETF Securities Ltd.’s exchange-traded products gained 0.9% that day to 7.913 million ounces.
Silver for December delivery in New York gained as much as 2.3% to a two-week high of 17.780 an ounce and was last at 17.70. Platinum for January delivery climbed 0.9% to 1,360.70 an ounce, while palladium for December delivery was 1.1% higher at 334.30 an ounce.
