Gold price rises hedge against inflation
Gold headed for a fifth weekly advance, the longest winning streak since November 2007, reported Bloomberg, as investors bought precious metals and other commodities on the expectation that an economic recovery will jumpstart inflation.
Bullion closed above GBP 1,000 for a fifth day yesterday as the Dollar Index, which gauges the strength of the U.S. currency against those of six major trading partners, dropped to the weakest level in almost a year yesterday.
Good news from the U.S housing market and reports that manufacturing in the Philadelphia region expanded more than forecast came with signs that a recovery could be imminent.
Trading prices on Immediate-delivery gold held steady at USD 1,014.10 an ounce at 2:36 p.m. in Singapore after rising as much as 0.2 per cent. The metal ended last week at USD 1,005.20 an ounce. The vast majority of traders and analysts expect bullion prices to rise next week, said Bloomberg.
According to research firm EPFR Global, commodity sector funds took in more than USD 1 billion in the week through Sept. 17 for the first time since records began in the first quarter of 2006. Exchange traded funds topped the list of funds attracting investment into commodity funds, pushing inflows above USD 9 billion this year.
The rising price of bullion is likely to encourage the sale of scrap gold, said an analyst, which could hold back the trading price of gold.
Among other metals for spot immediate delivery, silver fell 0.6 per cent to USD 17.18 an ounce, platinum gained 0.1 per cent to USD 1,336.75 an ounce and palladium lost one per cent to USD 310.25 an ounce, said Bloomberg.
