Investors Seek Refuge in Bullion
It was reported from NEW YORK/LONDON Reuters on Feb 19 that gold prices rose on Friday, reversing early losses fueled by a stronger dollar, as investors bought the metal to hedge against currencies’ volatility and debt default risks in Europe.
U.S. gold futures for April delivery GCJ0 were up $6.50 at $1,125.20 an ounce at 1:09 p.m. EST (1809 GMT) on the COMEX division of the New York Mercantile Exchange.
“Investors are buying gold as a hedge against currencies’ volatility,” said Carlos Sanchez, a metals analyst with CPM Group. “Gold seems to be consolidating near the $1,130 an ounce area.”
Gold priced in euros hit a record high of 826.35 euros an ounce as investors sought to diversify away from the beleaguered single currency.
Spot gold was bid at $1,124.45 an ounce at 1:13 p.m. EST (1813 GMT) against $1,111.40 late in New York on Thursday, having earlier touched a low of $1,098.55.
The metal’s usual relationship with the U.S. currency — strength in which normally weighs on the precious metal — has weakened as fears over the outlook for paper currencies in general lifted interest in bullion as an alternative asset.
The dollar hit an eight-month high against a currency basket on Friday, extending gains after the Federal Reserve’s surprise decision to raise its discount rate, its first hike in the rate since mid-2006.