Gold, little changed in Asia, may decline as the US dollar advanced against global currencies and some investors sold after the metal's jump to a record last week.
The Dollar Index, a six-currency gauge of the greenback's value, strengthened for a second day, supported by comments from Ben S. Bernanke. The Federal Reserve chairman said last week that the US central bank is ready to ''tighten'' monetary policy. Bullion touched an all-time high of $US1,061.55 an ounce on Oct. 8 and has advanced 19 per cent this year.
''The (US) dollar's strength, coupled with a recent rally in gold prices, is luring some investors to sell,'' said Park Jong Beom, a trader with Tongyang Futures Co. in Seoul. Still, the US dollar's rise today doesn't signal the reversal of the currency's downtrend, and ``I'm bullish on gold,'' said Park.
Gold for immediate delivery traded at $US1,050.20 an ounce at 12:55 p.m. in Singapore, compared with 1,049.25 on Oct. 9. The Dollar Index rose as much as 0.2 per cent to 76.604. Gold tends to move inversely to the U.S. currency.
The Federal Reserve has kept its benchmark lending rate between zero and 0.25 per cent since December to counter the effects of the recession. Consumer prices rose 0.4 per cent in August and were down 1.5 per cent compared with a year earlier, according to the Labor Department.
Bullion gained more than sixfold from 1977 to 1980, touching a then-record $US873 in January 1980 as the U.S. inflation rate topped 14 per cent.
Hedge Funds
Twelve of 19 traders, investors and analysts surveyed by Bloomberg, or 63 per cent, said bullion would rise this week. Six forecast lower prices and one was neutral.
Hedge-fund managers and other large speculators increased their net-long position in New York gold futures in the week ended Oct. 6, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 239,668 contracts on the Comex division of the New York Mercantile Exchange, the Washington- based commission said in its Commitments of Traders report. Net- long positions rose by 8,282 contracts, or 4 per cent.
Among other precious metals, silver rose 0.5 per cent to $US17.80 an ounce, platinum added 0.2 per cent to $US1,337.50 an ounce and palladium rose 0.4 per cent to $US321.25 an ounce.
