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Gold climbs to 2-month high
By Sara Lepro |
May 25, 2009, Monday
|
Print Edition
Print Edition
GOLD prices continued their climb last Friday, closing at a two-month high as the United States dollar sank to fresh lows against other major currencies.
Gold tends to move inversely with the US dollar because investors use it as a hedge against inflation, which can be ignited by a weak greenback.
The US dollar has been under pressure in recent weeks as investors worry that the flood of money the government is pumping into the system to stimulate the economy will weaken the dollar's purchasing power.
That fear was exacerbated this week after Standard & Poor's warned it could cut its rating on United Kingdom debt because of the massive amounts the British government is borrowing to prop up its financial system and boost its economy. That set off fears that the US government's own AAA credit rating might also be in trouble.
Gold for June delivery added US$7.70 to settle at US$958.90 an ounce on the New York Mercantile Exchange - the highest close since February 25. Prices gained 3 percent last week and are up 8.4 percent for the year.
Other metals also rose. July silver jumped 25 US cents to US$14.6950 an ounce, while July copper futures rose 4.65 US cents to US$2.0975 a pound.
Energy prices inched higher on the Nymex ahead of the long Memorial Day weekend, which kicks off the summer holiday season.
Gold tends to move inversely with the US dollar because investors use it as a hedge against inflation, which can be ignited by a weak greenback.
The US dollar has been under pressure in recent weeks as investors worry that the flood of money the government is pumping into the system to stimulate the economy will weaken the dollar's purchasing power.
That fear was exacerbated this week after Standard & Poor's warned it could cut its rating on United Kingdom debt because of the massive amounts the British government is borrowing to prop up its financial system and boost its economy. That set off fears that the US government's own AAA credit rating might also be in trouble.
Gold for June delivery added US$7.70 to settle at US$958.90 an ounce on the New York Mercantile Exchange - the highest close since February 25. Prices gained 3 percent last week and are up 8.4 percent for the year.
Other metals also rose. July silver jumped 25 US cents to US$14.6950 an ounce, while July copper futures rose 4.65 US cents to US$2.0975 a pound.
Energy prices inched higher on the Nymex ahead of the long Memorial Day weekend, which kicks off the summer holiday season.
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