NEW YORK (Commodity Online): There is no end to the rise and rise of gold and the yellow metal has crossed $1,130 per ounce in the global market on Monday.
With this continuous rise, fuelled by the weakening dollar, gold has made fun of all forecast by big analysts and stayed on course to cross $2,000 per ounce in the coming months.
Anticipating a huge rise in gold prices again, many investors have rushed in to buy gold as an investment.
The dollar slipped as much as 0.6 per cent against the euro in the past few days. Bullion usually gains when the US currency declines.
In London, bullion for immediate delivery climbed $12.20, or 1.1 per cent, to $1,116 an ounce, for a 1.9 per cent weekly gain. Spot gold prices are up 27 per cent this year, heading for a ninth annual increase, the longest winning streak since at least 1948.
Gold looks capable of maintaining its recent pace. Inflation expectations are rising, central banks are increasingly looking favourably on the metal and there are signs of improving demand, Barclays said in the report.
Gold futures for December delivery gained $10.10, or 0.9 per cent, to $1,116.70 on the New York Mercantile Exchange’s Comex division. The most-active contract rose 1.9 per cent for the week, the sixth gain in the past seven weeks.
The dollar is down 6.4 per cent against the euro this year. The US Dollar Index, the six-currency basket that includes the euro, yen and the pound, fell as much as 0.6 per cent and touched a 15-month low on November 11.
The strength in the gold price is demand-driven, mainly as an alternative to the dollar. Gold may extend gains next week on speculation that investors and central banks will buy the metal as an alternative to the slumping dollar.
The Federal Reserve is still focusing on keeping rates overly accommodative. This should keep the dollar retreating and add fuel to gold’s rally. The Fed last week repeated its intent to keep US interest rates near zero per cent for “an extended period.
Gross domestic product in the 16-nation euro region increased 0.4 per cent in the third quarter, the first gain since March 2008, the EU’s statistics office in Luxembourg said.
The return to growth, responding to government stimulus spending, may signal an end to the recession.
