Gold Gains as Dollar Falls on Reduced Demand for U.S. Assets
By Pham-Duy Nguyen
Jan. 17 (Bloomberg) -- Gold climbed in New York, erasing earlier losses, as the prospect of a weaker dollar spurs demand for the metal as an alternative investment.
Gold generally moves in the opposite direction of the dollar, which weakened against the euro and the yen after a report showed foreigners decreased purchases of U.S. securities in November. Gold gained 23 percent last year as the dollar fell 7 percent against a basket of six major currencies.
``The bounce in the currencies against the dollar is giving gold a boost,'' said Marty McNeill, a trader at R.F. Lafferty Inc. in New York.
Gold futures for February delivery climbed $1.60, or 0.3 percent, to $627.50 an ounce at 10:07 a.m. on the Comex division of the New York Mercantile Exchange. Prices fell as much as 0.9 percent earlier.
Foreigners bought a net $68.4 billion of U.S. securities in November, after a net purchase of $85.3 billion in October, government data showed. The median forecast in a Bloomberg News survey was for purchases to increase by $75 billion.
A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at [email protected] .
