By Matt Whittaker and Kelly Nolan
Of DOW JONES NEWSWIRES
NEW YORK - Investors continued to flee the U.S. dollar and plow money into other assets like equities and gold, sending the metal nearly 2 percent higher for the week in which gold almost continually extended record highs above $1,100 an ounce.
All gold participant eyes remain on the dollar as the metal's historically inverse relationship with the greenback has particularly heated up of late. Gold is considered a hedge against dollar weakness and more broadly as an alternative currency.
Lightly traded nearby November gold rose $10.10 to settle at $1,116.10 an ounce Friday (Nov. 13), up $21, or 1.92 percent, on the week on the Comex division of the New York Mercantile Exchange. Most actively traded December gold also gained $10.10, to $1,116.70.
Earlier in the week, the December contract hit $1,123.40, a most-active record. November reached a front-month peak of $1,121.30, and spot metal hit $1,122.87. Front-month gold is up about 26 percent so far this year.
"Activity remains pretty robust, particularly for a Friday," said Jim Steel, senior vice president and metals analyst with HSBC. Steel also noted that gold rallied despite oil prices being lower.
Oil and gold often move in generally the same direction as some investors buy commodities as a basket.
In recent trading, Nymex December crude was down 35 cents at $76.59 a barrel while the ICE Futures U.S. Dollar Index was down 0.383 point at 75.213 points.
"The gold market is kind of surprising here," as it holds on to the psychologically important $1,100 level, said Ralph Preston, senior market analyst with Heritage West Financial.
Watching the dollar's next moves will be crucial, Preston said. "It's going to be interesting whether the dollar is developing a bottoming formation or if it is about to fall off a technical cliff."
The buying in gold is largely coming from investors looking to profit from short-term market moves as participants seek to find a place for their cash other than the U.S. dollar.
Gold record highs on this type of speculative buying are particularly notable because demand from the world's largest jewelry buyer, India, has been slack because of higher prices and a weak monsoon season, which can damp the purchasing power of farmers.
Gold has also been jump started by central bank activity, including India's purchase of 200 metric tons from International Monetary Fund gold earmarked for sale while Sri Lanka has also been buying the metal.