MW: Gold rises as dollar weakens, making ninth yearly gain
Metals punctuate a year of big increases, especially for copper, palladium
By Moming Zhou, MarketWatch
NEW YORK (MarketWatch) -- Gold futures rose Thursday, ending 2009 with their ninth consecutive yearly gain as a weaker U.S. dollar increased gold's investment appeal.
On the Comex division of the New York Mercantile Exchange, the most actively traded February gold contract rose $3.70, or 0.3%, to $1,096.20 an ounce. It rose as high as $1,103 earlier, but as the dollar reduced its losses, gold also pared gains.
Futures ended the year's trading up 24%. Prices, however, have already come off from their record high above $1,220 an ounce hit in early December.
"In a nice bookend to the year, it appears that 2009 will end much the way it started in the financial markets, a dollar story," said Brian Kelly, chief executive of Kanundrum Research, a commodities and macroeconomic research firm. "For gold the catalyst in 2010 will be inflationary pressures."
The London fixing, a global benchmark for gold prices, also rose 25%. The SPDR Gold Trust (GLD 107.31, 0.00, 0.00%) , the biggest gold exchange-traded fund that tracks the London fixing, rose 24% this year.
Gold holdings in the SPDR trust stood at 1,133.62 metric tons as of Wednesday, up from 780.23 metric tons seen at the end of last year.
In foreign-exchange trading Thursday, the dollar fell against most rival major currencies, pressured by an apparent round of month- and year-end position squaring. The dollar index was last down 0.1% at 77.859, after falling 0.4% earlier. See Currencies.
Other metals also moved higher, with March silver gaining 4.3 cents, or 0.3%, to $16.845 an ounce. Silver rose 49% this year.
January platinum added $7.70, or 0.5%, to $1,460 an ounce, gaining 55% in 2009, and March palladium rose $12.10, or 3.2%, to $408.85 an ounce, rallying 117% in year.
March copper rose slightly to $3.3465 a pound, surging nearly 140%.
In economic news, the number of people filing initial claims for state unemployment benefits fell 22,000 to a seasonally adjusted 432,000 in the week ended Dec. 26, the lowest level since the summer of 2008, the Labor Department reported. See story on jobless claims.
