By Myra P. Saefong, MarketWatch
TOKYO (MarketWatch) -- Gold futures looked set to extend their gains from last week, as further weakness in the U.S. dollar helped fuel safe-haven buying, lifting the December contract to a fresh high above $1,130 an ounce late Monday afternoon in Asia.
"This is a different type of gold rally, with support coming from both sides of the market -- investment [and] fundamental," said Darin Newsom, a senior analyst at Telvent DTN.
The latest gains for the precious metal came on the heels of further weakness in the U.S. dollar, with greenback buying 89.56 Japanese yen, down from 89.72 yen late Friday in New York. Read related dollar story.
Against that backdrop, December gold -- the precious metal's most active contract -- climbed as high as $1,133.30 an ounce in electronic trading on Globex. By late Monday afternoon in Tokyo, the contract was at $1,132.10, up $15.40, or 1.4%.
The contract had climbed $10.10 Friday to finish last week with a gain of almost 2% on the New York Mercantile Exchange. November gold -- the thinly-traded, front-month contract -- closed Friday at $1,116.10 in New York. See Friday's Metals Stocks.
"A certain portion of the buying interest has come from the continued weakness of the dollar, but there is more to it than that," said Newsom.
"There is some 'safe haven' buying as well, but with copper holding firm and the Baltic Dry Index rallying, the Chinese economy seems to be gaining strength," boosting investor confidence, he said.
Additional buying for gold "has been tied to foreign governments and mining companies, who may have been short futures" as well as to exchange-traded fund buying, he said.
"All in all, everyone is getting bullish in this market as it continues to post new highs," he said.
