BLBG: Gold Climbs For Third Day as Declining Dollar Boosts Demand
By Jae Hur and Kim Kyoungwha
Feb. 3 (Bloomberg) -- Gold gained for a third day as the dollar extended a decline, fueling investor appetite for the metal as an alternative asset. Silver also climbed.
Gold for immediate delivery added as much as 0.8 percent to $1,123.82 an ounce, the highest intraday level since Jan. 20, before trading at $1,122.32 at 4:43 p.m. in Tokyo. Bullion for April delivery in New York gained 0.4 percent to $1,122.80 an ounce. The dollar dropped for a third day against a basket of six currencies.
“Price levels below the $1,100 an ounce level apparently attract buyers who consider this level as a lucrative entry point,” Eugen Weinberg, a senior analyst with Commerzbank AG, wrote in a note to clients.
Newmont Mining Corp., the world’s second-largest gold producer by sales, reaffirmed its forecast for gold to rise to $1,350 an ounce by the end of 2010.
“I feel pretty confident that as things move forward we will see continued support for the gold price,” Chief Executive Officer Richard T. O’Brien said today at the company’s $2.9 billion Boddington operation, Australia’s biggest gold mine. “No question it will be volatile, but we will see support.”
The Dollar Index, which measures its performance against six major currencies, slid 0.2 percent to 78.862. Gold typically moves inversely to the U.S. currency.
Gold climbed for the ninth consecutive year last year, reaching a record $1,226.56 an ounce on Dec. 3 as the dollar slumped amid record-low interest rates and a surge in government stimulus spending.
Forecast Gains
AngloGold Ashanti Ltd.’s Chief Executive Officer Mark Cutifani said on Feb. 1 that the metal may trade between $1,000 and $1,200 an ounce this year. At levels below $1,000, several producers would struggle as total costs to produce the metal are about $800 or $900 an ounce, he told reporters. AngloGold is the world’s third-biggest producer.
UBS AG revised forecasts for gold to an average $1,135 an ounce in 2010, compared with an earlier prediction of $1,050. The bank cut its target for silver by 2 percent to an average of $18 an ounce.
Silver gained 0.7 percent to $16.8175 an ounce, platinum added 0.5 percent to $1,589 an ounce and palladium climbed 0.8 percent to $445.75 an ounce.
To contact the reporters on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net; Jae Hur in Tokyo at jhur1@bloomberg.net
