Reuters logo
Gold rises above $1,060 on gains in euro, oil
October 21, 2009 / 8:21 PM / 8 years ago

Gold rises above $1,060 on gains in euro, oil

NEW YORK/LONDON (Reuters) - Gold prices clawed back above $1,060 an ounce Wednesday as oil rallied and the euro rose above $1.50 for the first time in 14 months.

The metal continued to take heart from a steadily falling dollar. Investors were turning to gold as the depreciation of global currencies threatened the value of paper assets.

Weak physical demand among jewelers and exchange-traded funds has put gold at the mercy of the currency markets, traders said.

Spot gold was at $1,062.70 an ounce at 3:07 p.m. EDT compared with $1,054.00 late Tuesday in New York.

U.S. December gold futures settled up $4.80 at $1,063.40 an ounce on the COMEX division of the New York Mercantile Exchange.

Prices have been tracking the euro-dollar exchange rate, with gold reaching record highs of $1,070.40 last week as the dollar hit its lowest level in over a year versus the single currency.

“Gold does not seem to have a mind of its own,” said Afshin Nabavi, head of trading at MKS Finance in Geneva. “It all depends on the euro.”

The dollar touched a one-month low against sterling and the euro broke above $1.50 as expectations for low U.S. interest rates weighed on the greenback.

OIL BACK ON TRACK

Oil jumped more than 3 percent toward $82 a barrel on Wednesday, its highest level in a year, due to a drawdown in U.S. refined oil inventories and as a rise in U.S. equities which showed optimism about the economy and a potential rebound in energy demand.

However, physical demand for gold remained slow as high prices put off buyers. In India, the world’s biggest gold consumer last year, buyers stuck to the sidelines as demand linked to last week’s festival period petered out.

Among other precious metals, spot silver was at $17.75 an ounce against $17.45.

Platinum and palladium prices held near recent multimonth highs, but traders worried that gold might retreat from recent gains and demand may fade for the used in catalytic converters.

Platinum was at $1,364 an ounce against $1,347, while palladium was at $337 versus $334.

ETF Securities USA filed a preliminary prospectus with the U.S. Securities and Exchange Commission on its proposed first-ever U.S. platinum exchange-traded fund (ETF).

The company is currently still under the registration process, and it is not allowed to further comment on the timing of regulatory approval, a spokeswoman said.

Separately, ETF Securities said in a note that its assets under management in its U.S. Physical Swiss Gold Shares (SGOL.P) and Physical Silver Shares (SIVR.P) had exceeded $350 million within two months of their inception.

Reporting by Frank Tang and Jan Harvey

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below