Feb. 17, 2005
Bloomberg
Gold prices in London rose as the dollar fell a fourth day against the euro, boosting the metal's appeal as an investment.
The dollar dropped as some traders bet that the interest-rate gap between the U.S. and Europe won't widen enough to extend the currency's 3.8 percent rally this year. Federal Reserve Chairman Alan Greenspan told the Senate Banking committee yesterday that the U.S. economy has ``firmed'' and the Fed's target rate is ``fairly low.''
``The euro is going up against the dollar, so gold is rising as well,'' said Wolfgang Wrzesniok, director of precious metals sales at Dresdner Kleinwort Wasserstein in Frankfurt. Wrzesniok said gold will trade between $421 and $428 today.
Gold for immediate delivery rose 75.5 cents, or 0.2 percent, to $425.955 an ounce in London at 9:56 a.m. The dollar traded at $1.3057 against the euro, down 0.2 percent, according to the EBS electronic currency dealing system.
Gold prices usually rise when the dollar falls as investors seek alternatives to declining U.S. assets. Dollar-denominated metals also become cheaper to buy with other currencies. Gold surged 20 percent in 2003, when the dollar fell by the same percentage against the euro.
Among other precious metals for immediate delivery in London, silver rose 5 cents, or 0.7 percent, to $7.265 an ounce. Platinum advanced $2.50, or 0.3 percent, to $858.50 and palladium gained $2, or 1.1 percent, to $182.50.
To contact the reporter on this story:
Danielle Rossingh in London drossingh@bloomberg.net.
To contact the editor responsible for this story:
Stephen Farr at sfarr@bloomberg.net.
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