Gold Gains to Record, Silver Extends Advance on Monetary Easing Concerns

Gold gained to a record for a third straight day and silver climbed to a 30-year high on speculation that government spending will weaken the dollar and spur demand for precious metals as alternative assets.


Gold for immediate delivery reached a record $1,355.97 an ounce before trading at $1,355.70 an ounce at 3:35 p.m. Seoul time. December-delivery futures also hit an all-time high, rising as high as $1,357.30 an ounce on the Comex in New York. Cash silver gained to $23.38 an ounce, the highest price since September 1980, and last traded at $23.3063.


“Sentiment for gold is still strong as the outlook for the dollar’s value is pretty dim,” said Hwang Il Doo, a senior trader at Korea Exchange Bank Futures Co. in Seoul. “Disappointing economic data is prompting speculation about further quantitative easing, thus boosting gold prices.”


The dollar traded near a 15-year low against the yen amid speculation the Federal Reserve will expand credit-easing steps to sustain the U.S. recovery. The greenback yesterday fell to the lowest level since January against a basket of six major currencies after data from a private report based on payrolls showed companies in the U.S. unexpectedly cut jobs in September.


Bullion surged 24 percent this year, heading for the 10th straight annual gain and the longest rally since at least 1920, as central banks have boosted debt purchases and cut interest rates to spur economic growth. The Fed has kept its benchmark interest rate at zero percent to 0.25 percent since December 2008 to revive the economy.


U.S. Fed


“The negative private sector job report, a precursor to Friday’s key Labour Department report, strengthened the view the Federal Reserve will proceed with a second round of quantitative easing,” Mark Pervan and Natalie Robertson, analysts at Australia and New Zealand Banking Group Ltd., said in a report.


The U.S. unemployment rate climbed to 9.7 percent in September from 9.6 percent in August, according to a Bloomberg News survey before tomorrow’s report.


Gold assets in exchange-traded products rose 0.7 metric ton to 2,095.6 tons as of yesterday, according to data from 10 providers. Holdings are up 17 percent this year and reached an all-time high of 2,097.01 tons on Sept. 30.


Gold futures for December delivery on the Multi Commodity Exchange of India Ltd. advanced as much as 0.6 percent to an all-time high of 19,642 rupees per 10 grams.


Platinum for immediate delivery advanced as much as 0.3 percent to $1,720.63 an ounce, the highest level since May 17.


Spot palladium gained as much as 1.3 percent to $594.02 an ounce, the highest price since March 2008. The metal closed at $586.25 yesterday, the highest settlement price since July 5, 2001.