Gold May Advance Toward $1,000 as Weakening Dollar Spurs Demand
Source: Bloomberg, Nicholas Larkin (9/7/09)
"Volatility could step up across the rest of the week as markets exit the summer doldrums. . ."
The dollar slipped as much as 0.4% against the euro as a report showed European investor confidence increased for a second month in September. Gold tends to rise when the greenback weakens. Bullion last surpassed $1,000 on Feb. 20.
“The underlying factor is still the dollar,” Dan Smith, a Standard Chartered Plc analyst in London, said by phone today. “If we do see a break in the dollar, it could be one of the triggers to take gold higher.”
Immediate-delivery bullion added 79 cents, or 0.1%, to $995.19 an ounce by 4:52 p.m. in London, erasing a gain of as much as 0.3%. The metal jumped 4.1 %last week, the most since April. December gold futures slipped 10 cents to $996.60 an ounce in electronic trading on the New York Mercantile Exchange’s Comex division.
“Volatility could step up across the rest of the week as markets exit the summer doldrums and traders and investors position for the remainder of the year,” James Moore, an analyst at TheBullionDesk.com in London, wrote in a report.
The metal increased to $992.75 an ounce in the morning “fixing” in London, used by some mining companies to sell production, from $989 at the afternoon fixing on Sept. 4.
“Sustained gains could be difficult without a pullback,” Pradeep Unni, an analyst at Richcomm Global Services in Dubai, said in a report. “Gold could be hit by near-term profit- taking.”
Bullion is 3.6% below a record $1,032.70 an ounce set in London in March 2008 and has rallied every year since 2000. Spot prices have gained in seven of the past eight weeks.