Gold futures rose, capping the longest rally in 11 weeks on signs of higher demand for jewelry, bars and coins, while the dollar’s decline bolstered the metal’s appeal as an alternative investment.
The greenback fell as much as 0.6 percent against a basket of six major currencies. Gold tumbled a record 23 percent in the second quarter, and some buyers have used the plunge as an opportunity for purchases, ABN Amro Group NV said today in a report.
“Retail buying remains strong, especially out of China,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview. “The weakness in the dollar is also putting some bid under gold.”
Gold futures for August delivery climbed 0.1 percent to settle at $1,247.40 at 1:41 p.m. on the Comex in New York. The price climbed for the third straight day, the longest rally since April 22.
The metal pared gains of as much as 1.2 percent in late trading before the release of the minutes from the June meeting of Federal Reserve policymakers.
This year, gold has dropped 26 percent, erasing $62.1 billion from the value of exchange-traded products backed by the metal. Some investors lost faith in the commodity as a store of value amid an equity rally and low inflation in the U.S.
Yesterday, gold ETP assets fell 10.1 metric tons to 1,983.6 tons, the lowest since May 2010, data compiled by Bloomberg show.
Gold doubled from the end of 2008 to a record $1,923.70 in September 2011 as the U.S. Fed led nations in cutting interest rates and buying bonds. The slide in 2013 follows 12 straight annual gains.
Silver futures for September delivery rose 0.1 percent to $19.165 an ounce on the Comex. The price climbed for the third straight day, the longest rally in four months.
This year, the price has slumped 37 percent, the most among 24 raw materials in the Standard & Poor’s GSCI Spot Index.
On the New York Mercantile Exchange, platinum futures for October delivery fell less than 0.1 percent to $1,368.10 an ounce.
Palladium futures for September delivery gained 2.4 percent to $713.80 an ounce. Earlier, the price reached $715, the highest since June 18.
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