SEPTEMBER 13, 2011
Weaker Dollar,EU Worry Push Gold To Gains
By Matt Day
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Gold rose Tuesday as a sharply lower dollar and the metal's declines to two-week lows drew some buyers back to the market.
The most actively traded gold contract, for December delivery, rose $16.80, or 0.9%, to settle at $1,830.10 a troy ounce on the Comex division of the New York Mercantile Exchange. Nearby
Gold futures fell by more than 2% Monday, and some traders Tuesday were reluctant to bet on further declines with Europe's debt crisis continuing to underpin demand for the metal as a safe haven.
"Risk is off the table," said Jon Nadler, an analyst with bullion dealer Kitco Metals. "At least for this week."
Some investors buy gold on the belief that it holds its value well during economic turmoil, and worries that European leaders won't be able to stave off a default-sparked credit crunch have kept investors interested in the metal despite its recent struggles. An Italian bond auction Tuesday disappointed, concerns mounted about the health of some of France's largest banks, and a brief bout of optimism that China's sovereign wealth fund might prop up struggling European economies faded.
Since touching a record high above $1,900 early last week, gold has lost much of its momentum as investors viewed briefly stable equities markets and a stronger dollar as an opportunity to cash out after the market's steep gains.
Though gold and the dollar can rise in tandem when investors are seeking a safe place to park cash, the assets have historically shown an inverse relationship, as a strong dollar makes dollar-denominated gold more expensive for buyers using other currencies.
The dollar was sharply lower against other major currencies Tuesday, adding fuel to gold's rise. The ICE U.S. Dollar Index was at 76.836 near the close of Comex floor trading, down from as high as 77.656 late Monday in New York.
Gold futures dipped below the $1,800 mark early Tuesday, but quickly rebounded above the key psychological level. Market participants who place bets based on patterns in trading activity likely view that strength as a sign that further gains are ahead for gold, said Sterling Smith, an analyst with Country Hedging.
Full story: http://online.wsj.com/article/BT-CO-20110913-711433.html?mod=hps_us_my_industries
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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