Gold gains as the dollar rallies against the euro
Gold gained for the first time in five days as the dollar's rally against the euro paused and crude oil's decline stalled, boosting the metal's appeal as a store of value.
Bullion rose as the dollar fell as much as 0.2 per cent against the euro after rallying to the highest in more than seven months yesterday. Oil in New York gained as US Gulf oil facilities seemed to have avoided damage from Hurricane Gustav.
"Investors are trying to work out the valuation price for gold when we face a strong US dollar, slow economic growth and oil coming under pressure,'' Jonathan Barratt, managing director of Commodity Broking Services, said yesterday. "In light of that, gold is holding up quite well.''
Bullion for immediate delivery advanced 0.6 per cent to $805.82 an ounce at 2:58pm in Singapore. Bullion touched $789.65 an ounce yesterday, the lowest since August 19. Silver for immediate delivery was 0.1 per cent lower at $12.90 an ounce.
Crude oil for October delivery rose as much as 0.6 per cent to $110 per barrel before trading at $109.10 a barrel on the New York Mercantile Exchange by 2:56pm in Singapore. The contract fell 7.5 per cent in the past four days, reaching a five-month low .
The dollar fell to $1.4528 against the euro and last traded unchanged from $1.4498 yesterday in New York. The dollar rose to $1.4385 against the euro yesterday, the highest since January 22. It's likely that bullion can rise even if crude oil resumes its downtrend in the short term, said Greg Canavan, a Sydney-based analyst.
"Gold is very cheap relative to oil and it is therefore conceivable that gold could rally while oil continues to struggle from a slowing global economy,'' he said.
Bullion rose as the dollar fell as much as 0.2 per cent against the euro after rallying to the highest in more than seven months yesterday. Oil in New York gained as US Gulf oil facilities seemed to have avoided damage from Hurricane Gustav.
"Investors are trying to work out the valuation price for gold when we face a strong US dollar, slow economic growth and oil coming under pressure,'' Jonathan Barratt, managing director of Commodity Broking Services, said yesterday. "In light of that, gold is holding up quite well.''
Bullion for immediate delivery advanced 0.6 per cent to $805.82 an ounce at 2:58pm in Singapore. Bullion touched $789.65 an ounce yesterday, the lowest since August 19. Silver for immediate delivery was 0.1 per cent lower at $12.90 an ounce.
Crude oil for October delivery rose as much as 0.6 per cent to $110 per barrel before trading at $109.10 a barrel on the New York Mercantile Exchange by 2:56pm in Singapore. The contract fell 7.5 per cent in the past four days, reaching a five-month low .
The dollar fell to $1.4528 against the euro and last traded unchanged from $1.4498 yesterday in New York. The dollar rose to $1.4385 against the euro yesterday, the highest since January 22. It's likely that bullion can rise even if crude oil resumes its downtrend in the short term, said Greg Canavan, a Sydney-based analyst.
"Gold is very cheap relative to oil and it is therefore conceivable that gold could rally while oil continues to struggle from a slowing global economy,'' he said.
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