Gold Jumps Most in a Week as Dollar Declines to Two-Month Low
February 08, 2012, 1:58 AM ESTBy Debarati Roy
Feb. 7 (Bloomberg) -- Gold futures jumped the most in a week as the dollar’s drop to the lowest in almost two months bolstered demand for the precious metal as an alternative investment.
The greenback fell as much as 0.7 percent to the lowest since Dec. 9 against a basket of major currencies including the euro. Greek officials worked on a final document needed for a second aid package, signaling progress on Europe’s debt crisis. The Standard & Poor’s GSCI Spot Index of 24 raw materials climbed as much as 1.2 percent.
“The dollar’s decline is pushing gold higher,” Fain Shaffer, the president of Infinity Trading Corp. in Medford, Oregon, said in a telephone interview.
Gold futures for April delivery climbed 1.4 percent to close at $1,748.40 an ounce at 1:40 p.m. on the Comex in New York. After the settlement, the metal reached $1,752.60 in electronic trading. The most-active contract has climbed 12 percent in 2012.
Earlier, the price dropped as much as 0.7 percent to $1,712.60, the lowest since Jan. 26.
Gold rallied after Federal Reserve Chairman Ben S. Bernanke repeated that the U.S. job market is still far from healthy, boosting demand for the metal as a haven.
There is “a long way to go before the labor market can be said to be operating normally,” Bernanke said in testimony prepared for the Senate Budget Committee.
“We are seeing some flight-to-quality money flowing in because of Bernanke’s comments,” Shaffer said.
Silver futures for March delivery gained 1.3 percent to $34.194 an ounce on the Comex.
On the New York Mercantile Exchange, platinum futures for April delivery jumped 1.5 percent to $1,654.80 an ounce. Palladium futures for March delivery rose 0.5 percent to $709.15 an ounce.
--With assistance from Maria Kolesnikova in London. Editors: Patrick McKiernan, Thomas Galatola
To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
