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Gold climbed to an 18-month high in New York and London on concern that a global economic recovery may stoke inflation and on a drop by the dollar that boosted demand for the metal as an alternative investment.
The worst U.S. recession since the 1930s has probably ended, Federal Reserve Chairman Ben S. Bernanke said yesterday. The U.S. Dollar Index slid to its lowest level in almost a year as a more optimistic economic outlook reduced demand for the currency’s relative safety. Gold futures are trading 1.4 percent below a record $1,033.90 an ounce set in March 2008.
“The inflation story has got people very concerned,” said Bernard Sin, head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. “People are trying to move dollars into commodities, especially gold. The market is really concerned about the behavior of the dollar.”
Gold futures for December delivery advanced as much as $17, or 1.7 percent, to $1,023.30 an ounce on the New York Mercantile Exchange’s Comex division and traded at $1,019.50 by 8:36 a.m. local time. The commodity closed yesterday at a record $1,006.30, Bloomberg data show. Bullion for immediate delivery climbed 1 percent to $1,017.67 in London.
Silver advanced to a 13-month high, and platinum and palladium gained to the highest prices in a year.
Headed for $1,100?