The dollar dropped as much as 1.2% against a weighted basket of six major currencies following a 3% gain in the previous two sessions. Gold’s rebound from a 13-month low in October has left the metal up 1.1% for the year and heading for an eighth straight annual gain.
Gold futures for February delivery rose $9.80, or 1.2%, to $847.20 an ounce on the New York Mercantile Exchange’s Comex division. The metal gained 11% in the previous two weeks. Silver futures for March delivery rose 1 cent to $10.86 an ounce. The metal has dropped 27% this year.
Investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, rose to a record 775.3 metric tons last week. The Federal Reserve cut its benchmark interest rate to the lowest ever on Dec. 16, to between zero and 0.25%, in a bid to revive the economy.
Gold is the fourth-best performer on the Reuters/Jefferies CRB Index of 19 raw materials this year. Gold may finish the year around $850, Societe Generale said in a report on Dec. 19. The metal faces selling around $915 and support around $800, the bank said.