Gold Rises as Russia Comments Weigh on Dollar
Source: Reuters, Kylie MacLellan and Jan Harvey (6/16/09)
"The dollar slipped against a basket of currencies after Russia said the world needed new reserve currencies. . ."
The dollar slipped against a basket of currencies after Russia said the world needed new reserve currencies, while the euro extended gains after a strong reading of German economic sentiment.
Oil rose above $72 a barrel as the dollar slid and U.S. housing data showed a jump in new construction starts and permits.
Spot gold was bid at $935.10 an ounce at 10:29 a.m. EDT, against $927.85 an ounce late in New York on Monday.
"The dollar has been the key thing," said Standard Chartered analyst Dan Smith. "The correlation with the dollar has stepped up quite a bit in the last few weeks."
"We have seen some quite good interest from investors as well," he added. "There has been quite a good uptick in terms of net speculative positions...I think that is generally supportive for gold and it suggests the downside is quite limited."
Gold has slipped sharply from the three-month high of $989.80 it hit earlier this month, as a dollar rally dampened investors' interest in gold and made dollar-priced commodities more expensive for holders of other currencies.
Among other precious metals, silver rose to $14.17 an ounce against $14.05.
Platinum was at $1,224.00 an ounce against $1,204, while palladium was at $243.00 against $240.50. Both are, like gold, tracking the dollar and overall interest in commodities.