Gold Rises to Seven-Month High as Dollar Declines Versus Yen
By Jesse Riseborough
Feb. 19 (Bloomberg) -- Gold in Asia rose to a seven-month high as a decline in the dollar against the yen boosted the appeal of the precious metal as an alternative investment.
The yen traded near a six-week high against the dollar on speculation the Bank of Japan may raise interest rates this week. Gold has risen five percent this year as a weakening dollar encouraged investors to build their bullion holdings.
``There is still evidence of investor support for gold and that is apparent in trading this morning,'' said David Moore, commodities strategist at Commonwealth Bank of Australia Ltd. in Sydney.
Gold for immediate delivery rose as much as $2.90, or 0.4 percent, to $671.95, the highest since July. It traded at $671.25 an ounce at 2:17 p.m. Sydney time. Financial markets in Singapore, Hong Kong, South Korea, Taiwan, China and the U.S. are closed today for holidays.
``I am still quite bullish, managing director of Sydney- based Commodity Broking Services, Jonathan Barratt, said today by phone from Sydney. ``The market is behaving in a very solid way and every dip seems to bounce.''
``Good support is at $664 an ounce and I would like to see it attempt $675 sometime this week and then we will see whether it will be a continuation move or a top,'' Barratt said.
Gold may gain for a seventh straight week on declines in the dollar, according to 17 of the 37 traders, investors and analysts surveyed by Bloomberg News from Sydney to Chicago on Feb. 15 and Feb. 16.
``We suspect that the recent move in gold has in fact been as a consequence of the weak U.S. dollar and should a weak dollar trend re-emerge then this will help support the gold market,'' the Sydney-based Commodity Broking Services said in a note to clients Feb. 16
In Japan, gold for delivery in December 2007 gained 17 yen, or 0.7 percent, to 2,601 yen a gram ($677 an ounce) at 1:00 p.m. Sydney time on the Tokyo Commodity Exchange.
Gold futures for April delivery rose $2.30, or 0.3 percent, to $675.10 an ounce in after-hours trading on the Comex division of the New York Mercantile Exchange.
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: Jesse Riseborough in Melbourne at [email protected]
