Comex Gold Surges To Near 3-Week High
1/6/2010 2:46 PM
By Allen Sykora
DOW JONES NEWSWIRES
Inflation concerns, continued beginning-of-year investment flows from funds, and late-day dollar weakness all enabled gold futures to hit their strongest level in nearly three weeks Wednesday.
Elsewhere in the precious complex, platinum and palladium hit their most muscular levels since 2008 on signs of stabilization in the auto sector and expectations for the launch of exchange-traded funds in the U.S.
Lightly traded but nearby January gold settled up $17.80 to $1,135.90 an ounce on the Comex division of the New York Mercantile Exchange, while most-active February climbed $17.80 to 1,136.50. Most-active March silver rose 37.5 cents to $18.175.
"Over the last few days, we've had some fairly decent economic numbers," said Bart Melek, global commodity strategist with BMO Capital Markets. "That is igniting concerns about inflation and is something that is going to be with us for a while."
Investors often buy gold as a hedge against inflation.
The headline number in a pair of surveys this week from the Institute for Supply Management both came in above the 50 reading that is generally seen as the breaking point on whether the economy is expanding or contracting. The December manufacturing index Monday posted a 55.9 reading, while the non-manufacturing survey Wednesday rose to 50.1 from 48.7 in November.
"The U.S. economy is set to grow," Melek said. Rising price pressures may not kick in until after 2010, but nevertheless some investors are already buying gold in anticipation of this, he said.