New York: Gold advanced for a third day on speculation that the dollar's retreat may boost demand for the precious metal as an alternative investment. Silver climbed to a one-week high.
Immediate-delivery gold climbed as much as 0.6 per cent to $1,391.95 an ounce and was at $1,389.97 at 4:36 pm in Tokyo. Gold for February delivery on the Comex in New York gained 0.6 per cent to $1,390.70 an ounce.
The dollar fell to a one-week low against the euro on speculation that a US report was expected to show home prices fell, backing the case for the Federal Reserve to keep interest rates near zero. Precious metals typically move inversely to the US currency.
"Bullion was supported by the dollar's decline amid relatively thin trade as the UK market is closed today," said Kazuhiko Saito, an analyst at Tokyo-based broker Fujitomi.
Bullion reached a record $1,431.25 an ounce on December 7 and has risen 27 per cent this year as Europe's debt crisis and low US interest rates spurred investment in precious metals. The metal is heading for a 10th consecutive annual gain, the longest winning streak in at least nine decades.
Dollar index falls again
The US currency dropped to $1.3223 per euro as of 4:38 pm in Tokyo from $1.3165 in New York yesterday, after earlier touching $1.3255, the lowest level since Dec. 17. The Dollar Index, which gauges the greenback's strength against six major counterparts including the euro and the yen, was 0.5 per cent lower, falling for a fourth day.
Silver for immediate delivery rose as much as 0.9 per cent to $29.5150 an ounce, the highest price since December 21, and traded at $29.3688 at 4:41 pm in Tokyo. The metal has climbed 74 per cent this year and may jump to as high as $40 next year, leading gains in the 15 commodities covered in a Bloomberg survey of more than 100 analysts, traders and investors.
Silver holdings in exchange-traded products, or ETPs, were unchanged at 15,073 metric tonnes yesterday, data from four providers show. Holdings reached 15,172 tonnes on December 17, the highest level since at least February.
Gold assets held in ETPs fell 0.3523 tonnes to 2,100.922 tonnes on Monday, according to data compiled by Bloomberg from 10 providers. Holdings reached a record 2,114.6 tonnes on December 20.
Palladium gained 0.4 per cent to $772.63 an ounce, advancing for a fourth day. Platinum rose 0.5 per cent to $1,744.75 an ounce after touching $1,746.88, the highest level since November 12.
