Immediate-delivery bullion gained as much as 0.3% to $1,431.48 an ounce, near a two-week high of $1,435.01 reached yesterday. It traded at $1,428.16 by 2:44 p.m. in Singapore. Gold futures for April delivery in New York gained 0.2% to $1,429 an ounce.
“The current uncertainties are fertile ground for precious metals,” Eugen Weinberg, Frankfurt-based head of commodity research with Commerzbank AG, wrote in a note to clients. “We expect the price of gold to rise further in the current climate and reach its record level.”
Gold advanced to a record $1,444.95 an ounce on March 7 after rallying 30% in 2010 on the prospect of rising inflation and currency debasement. The Dollar Index, a six- currency gauge of the greenback’s value, traded near the lowest level since December 2009. Bullion typically moves inversely to the dollar.
The Group-of-Seven nations last week vowed to curb gains in the yen as the Japanese currency reached a postwar high, endangering the country’s recovery from its biggest recorded earthquake, Bloomberg said.
“Support is also coming from the weak US dollar and expectations that western central banks could use the events in Japan as justification for maintaining their ultra-loose monetary policy,” Weinberg said.
Weakness in the dollar will help underpin gold prices should the inverse relationship between the two assets persist, according to Ong Yi Ling, Singapore-based analyst with Phillip Futures Pte Ltd.
Still, “should optimism increase that the worse of Japan’s nuclear crisis is over, this could reduce some safe haven demand for gold,” Ong said. Bullion will face resistance at about $1,435 an ounce, Ong said. A resistance level is marked by a cluster of sell orders.
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