noworldsystem.com


Oil hits $82, Gold $1065, Dollar $1.50 against Euro

ECONOMY: Oil hits $82, Gold $1061, Dollar $1.50 against Euro

Reuters Canada
October 21, 2009

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 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.

 


Leave a Comment so far
Leave a comment



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s



%d bloggers like this: