MW: Gold races towards $1,120 as dollar weakness resumes
NEW YORK (MarketWatch) -- Gold climbed to another record Wednesday, as upbeat economic data from Asia boosted hope for global growth just as continued expectations of globally loose money pressured the dollar back towards 15-month lows.
Gold for December delivery, the most actively traded contract, soared to an intraday high of $1,118.60 an ounce in electronic trading on Globex, surpassing Monday's high.
December gold futures were last up $14.90, or 1.4%, to $1,117.40 an ounce on the New York Mercantile Exchange. The thinly traded front-month November contract was last up $15.70 to $1,117.60 an ounce on Globex.
"As long as the U.S. dollar is trending down, the gold price is unlikely to soften meaningfully," wrote analysts at Commerzbank in a note to clients.
"Price declines are currently viewed as a buying opportunity," they said. "This is true for speculative investors in particular."
Good economic news from Asia boosted risk appetite and pressured the dollar, burnishing the investment appeal of the precious metal.
China's industrial production and retail sales continued to accelerate at a faster-than-expected pace in October, while Japan's private-sector machinery orders rose for a second month in September, according to data released Wednesday.
The dollar index (DXY 74.94, -0.09, -0.11%) , which tracks the performance of the greenback against a basket of other major currencies, fell 0.2% 74.892.
When the dollar declines in value, gold prices tend to rise.
"Technical factors will have the most important negative influence on gold prices in the near term" as the metal is overbought, said Tom Pawlicki, analyst at MF Global, in a note to clients.
"Longer-term support will be maintained from our belief that the [U.S. Federal Reserve] will maintain low rates, worries we have over the situation in Iran, and from increased investor interest," Pawlicki said.
The Federal Reserve needs to keep interest rates near zero because the outlook for the U.S. labor market remains grim, senior Fed officials said Tuesday in a series of speeches. See story on what Fed officials had to say.
Gold holdings in the SPDR Gold Trust, (GLD 109.04, +0.65, +0.60%) , the biggest exchange-traded fund dedicated to the precious metal, were unchanged from Monday's level, when they rose 6.1 metric tons to 1,114.44 tons.
Elsewhere in the metals complex, December silver futures rose 43 cents, or 3.2%, to $17.66 an ounce and January platinum futures added $26.90, or 1.9%, to $1,377.00 an ounce.
December copper rose 4 cents, or 1.4%, to $3.00 a pound.
