Gold Rises in New York on Dollar, Central-Bank Purchase Concern

5 November 2009  Bloomberg.com

Nov. 5 (Bloomberg) -- Gold gained for a fourth day in New York on concern that a weaker dollar will boost the metal’s appeal as an alternative investment and that central banks may buy more bullion.

Bullion futures, up 23 percent this year, rose to a record $1,098.50 an ounce yesterday after the Federal Reserve pledged to keep interest rates low for an “extended period,” weakening the dollar. The dollar lost 0.2 percent against the euro today. Gold also climbed this week as the Reserve Bank of India said it bought 200 metric tons from the International Monetary Fund.

“The U.S. can’t afford to raise rates,” said Frank McGhee, head dealer at Integrated Brokerage Services LLC in Chicago. “That will weaken the dollar, and gold absolutely benefits from this scenario.”

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aewIcFDuTVUw