Reply #54: Gold end $12 higher, lifted by weak dollar prospects [View All]

[54anickel]

http://www.marketwatch.com/News/Story/Story.aspx?siteid=mktw&dist=moreover&guid={36ACF5F5-0778-4B31-9942-A37270854AAC}

SAN FRANCISCO (MarketWatch) -- Gold futures climbed more than $12 an ounce Wednesday to close at their strongest price since early September, buoyed by recent dollar weakness and continued reports of robust physical demand linked to the holiday season.

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Gold for December delivery closed up $12.50, or 2.1%, at $619.30 an ounce on the New York Mercantile Exchange after trading as high as $619.70. It hasn't closed or traded at levels this high since early September. The contract fell Tuesday on diminishing geopolitical worry after North Korea agreed to resume six-party nuclear talks, but gained $3 on the month amid worries about a U.S. economic slowdown.

"The recent weakening in the dollar due to last week's poorer-than-expected U.S. economic figures has pushed up the gold price in dollar terms," said analysts at Numis Securities.

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The dollar touched five-week lows against the euro and yen Wednesday after a batch of economic reports reinforced the market view that the U.S. economy is slowing. See Currencies.

"The dollar has taken some serious uppercuts of late, and U.S. consumers have not only toned down their optimism quite rapidly, but are not too eager to spend the extra few dollars in their wallets that a curiously cheaper gasoline price has suddenly yielded," said Jon Nadler, an investment-products analyst at Kitco.com.

"Gold will bounce along quite nicely if the dollar continues to have such flu symptoms and/or if people start pulling some money off the very, very rich pile that is sitting on the equities gaming tables," he said.

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