Daily Gold Update

Source: Marketwatch.com

San Francisco— Gold futures climbed as much as $8 an ounce Tuesday to trade at a one-week high as uncertainty surrounding Ben Bernanke's nomination as the next chairman of the U.S. Federal Reserve pressured the dollar.

Gold for December delivery climbed as high as $475.30 an ounce on the New York Mercantile Exchange, a level not seen since Oct. 18. The contract was last at $474.50, up $7.50, or 1.6%.

It might be "premature" to judge Federal Reserve Chairman-designate Ben Bernanke as "one who favors inflation targeting," Nell Sloane, an analyst at NSFutures.com said in daily commentary.

But "the foreign exchange markets apparently think he is less concerned with budget deficits — and that could be why the dollar has sagged and in turn yielded some minor support to gold," she said.

Indeed, "once the world, particularly the foreigners who have been supporting our massive current account deficit, becomes more and more familiar with many of Mr. Bernanke's past remarks, they will become increasingly less inclined to be 'long' the U.S. dollar," said Richard Sacks, a managing partner at Brick Capital Partners L.P.

This has "bullish longer-term implications for gold, and conversely, bearish implications for the U.S. dollar as well as the ongoing willingness of foreign capital to sustain our massive imbalances," he said.

Gold prices fell over $2 Monday, but even though "the bears try to give gold a licking … the secular gold bull market keeps ticking," said Peter Grandich, editor of the Grandich Letter. "Once again gold has corrected some excesses and is now poised to rise to new highs and challenging the $500 level is now in sight."

Other metals futures on the Nymex followed gold higher Tuesday.

December silver was up 13.7 cents to stand at $7.845 an ounce after tapping a one-week high of . December copper rose 3.25 cents, or 1.8%, to $1.817 a pound — nearing the all-time high of $1.832 from Oct. 17. December palladium traded at $219.50 an ounce, up $5.70. Sister metal October platinum climbed $10.20, or 1.1%, to $943 an ounce.

Tracking inventories, copper supplies were unchanged at 3,690 short tons as of late Monday, according to Nymex. Silver stocks were also flat at 116.7 million troy ounces, while gold inventories stood at 6.35 million troy ounces, down 1,929 troy ounces from the previous session.

Indexes tracking equities in the metals-mining sector mirrored gold's strength to also trade at their highest levels in about a week Tuesday.