Oct. 10 (Bloomberg) -- Gold futures rose the most in a week and silver advanced as the dollar’s decline spurred demand for precious metals as alternative assets.
The greenback was poised for the biggest drop in 29 months against a basket of major currencies as French and German leaders pledged to deliver a plan to stem the sovereign-debt crisis. Gold dropped 11 percent last month, partly on investor sales to cover losses in equity markets.
“A weaker dollar is supporting gold,” Sterling Smith, an analyst at Country Hedging Inc. in St. Paul, Minnesota, said in a telephone interview. “We are seeing physical demand in silver and gold.”
Gold futures for delivery in December rose 2.1 percent to $1,670.80 an ounce at 12:44 p.m. on the Comex in New York. A close at that price would mark the biggest gain for a most- active contract since Oct. 3. Before today, the metal climbed 15 percent this year, reaching a record $1,923.70 on Sept. 6.
Silver futures for December delivery rose 3.6 percent to $32.11 an ounce on the Comex. Before today, the metal advanced 37 percent in the past 12 months.
--With assistance from Glenys Sim in Singapore. Editors: Patrick McKiernan, Millie Munshi
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