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Published: Tuesday October 13, 2009 MYT 7:53:00 AM
Updated: Tuesday October 13, 2009 MYT 7:54:46 AM

Analysts expect gold prices to go up further


NEW YORK: Gold and other metals gained ground Monday as both the dollar and the British pound weakened.

Gold closed above the $1,000 level for the ninth day in a row, adding $8.90 to $1,057.50 an ounce on the New York Mercantile Exchange.

December silver rose 13 cents to $17.82 an ounce after earlier reaching $17.99, its highest level since July 2008.

Investors have been flocking to gold, and subsequently other precious metals, in recent weeks as the dollar continues to weaken.

Investors buy gold as protection against inflation and a weaker dollar.

With the Federal Reserve promising to keep U.S. interest rates at a record low of near zero for the foreseeable future, analysts expect gold to fetch higher prices in the coming months.

Low interest rates tend to weaken a country's currency as investors go in search of higher returns elsewhere.

European interest in gold increased Monday as the British pound slipped, said George Gero, vice president at RBC Capital Markets Global Futures in New York.

"The weaker pound means they may be exporting a lot more but what they import may become inflationary," Gero said.

Adding to the gains, Gero said, was pent-up demand from Chinese traders, who stepped up their buying of gold after a weeklong holiday closed markets there last week.

Among other precious metals, October platinum gained $7.80 to $1,339.40 an ounce.

Palladium also rose.

December copper futures inched up 1.9 cents to $2.8570 a pound.

The weaker dollar also helped push oil prices above $73 a barrel.

Crude has risen over the past two weeks despite evidence that energy supplies remain high.

In addition to the falling dollar, cooler-than-normal temperatures across the U.S. helped contribute to higher prices on Monday.

Light, sweet crude for November delivery rose $1.50 to settle at $73.27 a barrel.

In other Nymex trading, gasoline futures gained 3.1 cents to $1.799 a gallon, while heating oil futures rose 4.16 cents to $1.8944 a gallon.

On the Chicago Board of Trade, December wheat futures jumped 26.25 cents to $4.9425 a bushel and December corn rose 19 cents to $3.8125 a bushel.

November soybeans jumped 35 cents to $9.99 a bushel.

Other soft commodities, including cotton, sugar and coffee, also rose.

Bucking the trend, cocoa prices dropped $175, or 5.4 percent, to $3,068 a ton after hitting a contract high of $3,329 on Friday. - AP

Gold futures trading on the NY Merc Monday: (100 troy oz.; dollars per troy oz.)

 Open High Low Settle Change

Oct 1057.50 1058.40 1049.00 1056.70 Up 8.90

Nov 1056.30 1058.90 1048.30 1057.00 Up 8.90

Dec 1058.80 1060.50 1048.00 1057.50 Up 8.90

Feb 1060.00 1060.80 1049.90 1058.80 Up 8.90

Apr 1061.10 1062.60 1051.60 1060.00 Up 8.90

Jun 1056.70 1062.40 1053.30 1061.30 Up 8.90

Aug 1056.90 1063.00 1056.90 1063.00 Up 8.90

Oct 1061.70 1065.00 1061.70 1065.00 Up 8.90


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