PRECIOUS METALS: Comex Gold Futures Rally On Weaker US Dollar

   By Matt Whittaker 
   Of DOW JONES NEWSWIRES 
 

NEW YORK (Dow Jones)--Gold futures rallied above $1,000 an ounce on a weaker dollar, a bounce in equities and higher crude oil prices.

December gold rose $14.90 to settle at $1,009.30 an ounce on the Comex division of the New York Mercantile Exchange.

The reversal in the stock market sparked inflation-hedge buying in gold, says Sterling Smith, commodity trading adviser and analyst at Country Hedging. Shortly after gold closed, the Dow Jones Industrial Average was up 13.99 points after reversing earlier losses.

Gold is also often bought as a hedge against dollar weakness and, more generally, as an alternative currency. Shortly after gold closed, the ICE Futures U.S. dollar index was down 0.44 point.

Also, apparent divisions in Federal Reserve policy are stoking some economic tensions and leading to buying gold as a haven, Smith said.

The president of the Federal Reserve Bank of Atlanta, Dennis Lockhart, said Wednesday the Federal Reserve's policy makers have divergent views on how to proceed with the central bank's gradual withdrawal of its stimulus measures from financial markets.

The dollar weakness sparked technical buying, said Charles Nedoss, senior account manager and metals analyst with Peak Trading Group.

The support helped push gold through a round of pre-placed buy orders around $1,001 an ounce, he said.

"You're seeing a lot of technical buying coming in here," he said.

Rallying crude prices also helped gold, said Stephen Platt, analyst with Archer Financial Services. Shortly after gold closed, Nymex November crude was up $3.11 a barrel.

Silver futures settled higher in tandem with gold and copper. The gray metal often trades in line with gold because the two have similar investment purposes. Also, silver can track copper because both metals are used for industrial purposes.

"It was just following the gold and the copper," Smith said. Comex December silver rose 48 cents to settle at $16.658 an ounce.

Platinum group metals also followed gold futures higher. Nymex January platinum rose $24.70 to settle at $1,302.90 an ounce while December palladium on the exchange gained $9.20 to settle at $299.20 an ounce.

Month-end book squaring also boosted platinum and palladium, a trader said.

 
Settlements (ranges include open-outcry and electronic trading): 
London PM Gold Fix: $995.75; previous PM $989.50 
Spot gold at 1:34 p.m. EDT: $1,007.70, up $16.50; Range: $991.42-$1,009.35 
Dec gold $1,009.30, up $14.90; Range $992.70-$1,010.80 
Dec silver $16.658, up 48 cents; Range $16.170-$16.690 
Jan platinum $1,302.90, up $24.70; Range $1,275.50-$1,308.50 
Dec palladium $299.20, up $9.20; Range $288.70-$299.80 
 

-By Matt Whittaker, Dow Jones Newswires; 212-416-2139; matt.whittaker@dowjones.com

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(END) Dow Jones Newswires

September 30, 2009 14:51 ET (18:51 GMT)


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