BLBG: Gold Rebounds on Speculation Dollar Will Stoke Investor Demand
By Pham-Duy Nguyen and Nicholas Larkin
Jan. 25 (Bloomberg) -- Gold rose in New York, rebounding from a one-month low, on speculation that a weaker dollar will boost the appeal of the precious metal as an alternative investment.
The dollar has been little changed against a basket of six major currencies for three sessions since reaching a five-month high last week. Before today, gold gained 27 percent in the past year as the dollar dropped 8.5 percent.
“The dollar is giving traders a green light to buy gold,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. “The market is going to be range-bound until we get more clarity on interest rates and the direction of the dollar.”
Gold futures for February delivery rose $6.30, or 0.6 percent, to $1,096 an ounce at 10:43 a.m. on the New York Mercantile Exchange’s Comex unit. Prices touched $1,081.90 on Jan. 22, the lowest level since Dec. 23.
In 2009, gold rallied for a ninth straight year as the Federal Reserve kept interest rates near zero percent to revive growth, driving the dollar lower.
Last week’s 3.6 percent decline for gold, the most in six weeks, may encourage some investors to buy, especially in China, James Moore, an analyst at London-based TheBullionDesk.com, said in a report.
“With rising physical demand ahead of the Lunar New Year, dips are likely to be viewed as good bargain-hunting opportunities,” Moore said, referring to the start of China’s weeklong Lunar New Year holidays on Feb. 14.
In other metals markets, silver futures for March delivery rose 18.3 cents, or 1.1 percent, to $17.115 an ounce on the Comex. Platinum futures for April delivery was little changed at $1,549.60 an ounce in New York. Palladium futures for March delivery rose $6.90, or 1.6 percent, to $437.10 an ounce.
Platinum holdings in ETF Securities Ltd.’s U.S. exchange- traded product rose 10 percent to 164,874 ounces as of Jan. 22, according to the company’s Web site. Palladium assets climbed 33 percent to 279,956 ounces. The products began trading on Jan. 8.
To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
