Gold prices climbed for the sixth straight session on speculation that the US dollar will decline, boosting demand for the metal as an alternative investment.
The US dollar touched a 15-month low against a basket of major currencies on Nov. 16. The greenback climbed as much as 0.8 per cent today. Gold reached a record $US1,153.40 an ounce on Nov. 18 and has fallen once in 15 sessions this month. The metal has climbed 30 per cent this year, heading for a ninth straight annual gain.
``People are still buying gold because they think the dollar hasn't been broken yet,'' said Marty McNeill, a trader at R.F. Lafferty Inc. in New York. ``If the (US) dollar rallies, it's an excuse to sell for profit. Any dip in prices is a buying opportunity.''
Gold futures for December delivery rose $US4.90, or 0.4 per cent, to $US1,146.80 on the Comex division of the New York Mercantile Exchange. Earlier, the price dropped as much as 0.8 per cent. The metal gained 3.2 per cent in the previous five sessions. In November, the price has climbed more than $US100.
The popularity of exchange-traded funds backed by gold may diminish the historic inverse correlation between the dollar and the metal during times of financial turmoil, Deutsche Bank AG said today in a report.
Investors have poured $US55.5 billion into gold ETFs in the nine months ended Sept. 30, Jason Toussaint, the World Gold Council's managing director of ETFs, said this week. SPDR Gold Trust, the biggest bullion-backed ETF, has almost 1,118 metric tons, or more than China's reserves.
Correlation `fade'
``The gold price should not fear a new long-term uptrend in the (US) dollar,'' Deutsche Bank said. ``In periods of risk aversion which lead to a strengthening (US) dollar and strong inflows into gold ETFs, the strong correlation may start to fade.''
China ranks sixth among official holders with 1,054 tons, according to data from the producer-funded council. The US is the largest.
Silver futures for December delivery fell 1.5 cents to $US18.44 an ounce in New York. Platinum for January delivery fell $US2 to $US1,441.90 an ounce. Palladium for December delivery declined $US5.55, or 1.5 per cent, to $US364.35 an ounce, the biggest drop in three weeks.
