MW: Gold futures rise for fourth day on inflation worries
By Moming Zhou, MarketWatch
NEW YORK (MarketWatch) -- Gold futures rose Wednesday for a fourth straight session, climbing above $1,130 an ounce on concerns that the ongoing economic recovery could bring higher inflation, increasing gold's investment appeal.
The four-day winning streak, the longest in one month, came after the metal declined more than 7% in December, the biggest monthly loss in 14 months.
Gold for February delivery gained $11.40, or 1%, to $1,130.20 an ounce on the Comex division of the New York Mercantile Exchange, after rising to $1,133 an ounce earlier in the session.
"The global economy is improving at a faster pace than expected, and the net result is increased demand for products, which causing a [price] rise in commodities," said Brian Kelly, chief executive of Kanundrum Research, a commodities and macroeconomic research firm.
"Investors are interpreting these price increases as inflationary and are buying gold as a hedge."
Economic data coming out Wednesday reinforced hopes for an economic recovery. Private-sector firms in the U.S. eliminated 84,000 jobs in December, according to the ADP employment report. It was the fewest jobs lost since March 2008.
Wednesday's gains in gold came despite a stronger dollar, which tends to add downward pressure on dollar-denominated commodities. In currencies trading, the dollar index (DXY 77.68, +0.06, +0.08%) was last up 0.1% at 77.705.
"Strength in gold in the face of a stronger dollar is quite bullish for the yellow metal," Kelly said.
Holdings in the SPDR Gold Trust (GLD 110.55, +0.85, +0.78%) , the biggest gold exchange-traded fund, stood at 1,128.75 metric tons Tuesday, unchanged from a day ago.
In other metals, March silver gained 1.2% to $18.01 an ounce, March palladium added 0.3% to $423 an ounce and April platinum rose 1.3% to $1,558 an ounce.
