Wednesday, July 20, 2011
Gold Poised for Third Weekly Gain as Dollar Slumps Against Euro
5:31 AM | 
Posted by
bayan |
May 22 (Bloomberg) -- Gold traded near the highest in two months, set for a third weekly increase, as the dollar fell against the euro, boosting the appeal of the precious metal as an alternative investment.
The Dollar Index, a measure of the greenback against six major currencies, has lost 3.2 percent this week on speculation that the U.S. government’s creditworthiness may be weakening, after Standard & Poor’s yesterday cut its outlook on the U.K.’s AAA credit rating to “negative” from “stable.”
“Investor interest in gold was bolstered by the declines in international equity markets and the soft tone of the U.S. dollar,” David Moore, chief commodity strategist at Commonwealth Bank of Australia, said in an e-mail today.
Immediate-delivery gold was little changed at $952.45 an ounce at 12:27 p.m. in Singapore after touching $956.55 yesterday, the highest since March 23. The metal has climbed about 7.2 percent this month and is about 19 percent higher than this year’s low of $802.59 an ounce. Silver, which dropped 0.2 percent to $14.49 an ounce, is still up 3.5 percent this week.
Bill Gross, co-chief investment officer of Pacific Investment Management Co. in Newport Beach, California, said yesterday that the U.S.’s top AAA credit rating will “eventually” be lost. “The markets are beginning to anticipate the possibility of” a downgrade, Gross said.
U.S. stocks slumped for a third day yesterday on worries about the debt-rating and worse-than-expected U.S. jobless claims. Initial jobless claims fell to 631,000 in the week ended May 16, the Labor Department said, compared with the economists’ median estimate of 625,000. The regional benchmark MSCI Asia Pacific Index dropped for a second day.
Platinum Gains
Platinum rose 0.2 percent to $1,154.50 an ounce, up 4.5 percent this week on optimism demand for the metal used in pollution-control devices in cars will gain after President Barack Obama set a national standard for U.S. auto emissions. Palladium was at $233.50 an ounce, 3.9 percent higher this week.
U.S. automakers must meet average efficiency standards of 35.5 miles per gallon by 2016, four years sooner than planned, Obama said on May 19.
The metal also rose this week after Johnson Matthey Plc, the platinum trader and refiner that produces one-third of all catalytic converters, said that rising demand for jewelry in Asia this year may help boost the price as high as $1,350 in the next six months, a gain of 15 percent from today’s price.
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