Gold for August delivery hit a five-week high in overnight trading as a weaker US dollar and higher crude oil prices boosted the metal’s appeal as an alternative investment and hedge against inflation.
Bullion for immediate delivery gained as much as $16.40, or 1.7%, to $953.90 an ounce, the highest since June 12. The metal, which climbed 2.7% last week, was trading at $952.60 by 9:00 a.m. EST.
Crude oil also found strength in the London market gaining as much as $1.53, or 2.7%, to $65.90 per barrel. This is the highest level for oil since July 6.
Meanwhile, the US dollar fell sharply against most major currencies on speculation that this week's European and US economic reports will show the global recession is easing, sapping demand for the greenback as a refuge. The US Dollar Index, a measure of value of the dollar against a basket of six major world currencies, dropped to a near seven-week low, dow 0.7% to 78.925.
In other precious metals, silver climbed as much as 2.6% to $13.75 an ounce while platinum put on 1.1% to $1189.90 an ounce and palladium gained 1.4% to 254.50 an ounce.
Managing Editor, Gold World