MW: Gold futures soar to high as dollar falls vs. rivals
By Polya Lesova, MarketWatch
FRANKFURT (MarketWatch) -- Gold futures climbed to a record on Wednesday, as the dollar fell against other major currencies, polishing the investment appeal of the precious metal.
Gold for December delivery, the most active contract, hit an intraday high of $1,148.40 an ounce in electronic trading on Globex. That surpassed Monday's contract high of $1,144.20 an ounce.
In recent trading, December gold futures were up $6.80, or 0.6%, to $1,146.20 an ounce.
Gold is underpinned by "trends that are already in place rather than from new sparks of buying interest," wrote Tom Pawlicki, analyst at MF Global, in a note to clients.
Overbought conditions point to gold's vulnerability to a downside correction, he said.
However, "support will come from potential that the dollar resumes its long-term downtrend, potential reserve diversification, the likelihood that U.S. rates remain low, and from investor demand for commodities," Pawlicki said.
The U.S. dollar dropped against its major rivals on Wednesday, as European shares posted gains for the fifth time in six sessions. See Currencies.
The dollar index (DXY 75.01, -0.36, -0.47%) , which tracks the performance of the greenback against a basket of other major currencies, fell 0.5% to 74.994.
Gold and the greenback have a very strong inverse relationship. When the dollar falls, gold prices tend to rise.
Other metals futures also posted gains on Wednesday. December silver futures rose 27 cents, or 1.5%, to $18.66 an ounce and December copper gained 6 cents to $3.17 a pound.
