Gold Has Biggest Gain in a Month as Stocks Fall, Dollar Weakens
By Claudia Carpenter
New York, Jan. 8 (Bloomberg) -- Gold prices had their biggest gain in almost a month as U.S. stocks fell and the dollar weakened against the euro and yen, increasing the attractiveness of the metal for investors.
The 1.9 percent gain for gold left prices close to their highest in almost six years. Gold soared 25 percent in 2002, the biggest annual gain in 23 years, on declines for stocks and the dollar. The value of gold investments almost tripled to $4 billion last year, according to Gold Fields Mineral Services Ltd.
``There is always more interest in gold when the stock market is coming down,'' said Steve Miller, a broker at Citigroup Inc.'s Salomon Smith Barney in New York. ``The dollar is also going lower, and that's going to be even more beneficial for the price of gold.''
Gold for February delivery rose $6.70 to $354.40 an ounce at 12:35 p.m. on the Comex division of the New York Mercantile Exchange. If the contract settles at that price it would be the biggest one-day gain since Dec. 12. Gold touched $357 two days ago, the highest intraday price for a most-active contract since March 1997.
Net investment in gold, including gold bars and coins and purchases of derivates such as futures contracts, rose to about $4 billion last year from about $1.5 billion in 2001, London-based Gold Fields Mineral Services said.
``We've seen a substantial pickup in investment demand, and this is in a sense a measure of new money,'' said Philip Klapwijk, the company's managing director. ``It's still relatively small when you compare it to other investment classes.''
The gain for gold accelerated in late-morning trading after the dollar weakened against the euro, retreating from earlier gains. A weaker dollar makes dollar-priced gold cheaper for buyers using other currencies.
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