London : Gold may extend gains from an eight-week high in London as a weaker dollar and growing concerns that the economy is sputtering spur demand. Silver also climbed to an eight-week high.
The dollar fell for a second day against the euro on speculation central bankers will signal their intention to maintain stimulus measures. Gold, which usually moves inversely to the greenback, is 1.8 per cent below a record. Orders for durable goods in the US increased less than forecast in July while sales of new homes unexpectedly dropped, reports showed on Wednesday.
"As long as US economic releases continue to come in below expectations there is little risk of falling gold prices," said Filip Petersson, an analyst at Stockholm-based bank SEB AB. "The fact that the dollar appears to have lost momentum is also supportive."
Immediate-delivery bullion added as much as $3.50 (Dh12.85), or 0.3 per cent, to $1,243.55 an ounce, the highest price since July 1. Prices were at $1,242.40 at 9:18 a.m. in London yesterday. The metal for December delivery was 0.2 per cent higher at $1,243.70 on the Comex in New York.
Federal Reserve Chairman Ben S. Bernanke, European Central Bank President Jean-Claude Trichet, and Bank of Japan Governor Masaaki Shirakawa are all scheduled to attend the Fed's annual symposium at Jackson Hole, Wyoming, which starts today. Bernanke will discuss the outlook for the economy at the conference.
Gold strengthened 13 per cent this year, reaching an all-time high of $1,265.30 an ounce on June 21, as investors sought to protect their wealth against financial turmoil in Europe and the prospect of slowing economic growth. Nouriel Roubini, the New York University economist who predicted the global financial crisis, said US growth will be "well below" 1 per cent in the third quarter and put the odds of a renewed recession at 40 per cent.
"Strong momentum will continue into next week as fears of a hard landing for the global economy are growing bigger," Hwang Il Doo, a Seoul-based senior trader with KEB Futures Company, said yesterday. "The market is on the lookout for more indicators that may suggest the global economy is cooling."
Jobless benefits
A US Labour Department report yesterday may show initial claims for US jobless benefits declined to 490,000 last week from a nine-month high of 500,000 the previous week, according to economists surveyed by Bloomberg.
Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were unchanged at 1,297.95 metric tonnes on Wednesday, figures on the company's website showed.
Silver for immediate delivery in London gained as much as 1.1 per cent to $19.11 an ounce, the highest price since June 28, and last traded at $19.0363. Platinum added 0.5 percent to $1,538.25 an ounce. Palladium rose 1.1 per cent to $500.50 an ounce.
