Daily Gold Update

Source: Bloomberg

London— Gold rose to a three-week high in London as the dollar weakened on expectations European interest rates will rise, spurring buying by investors who use the metal as a hedge against further declines in the U.S. currency.

The euro has advanced against the U.S. currency for three consecutive days on speculation European Central Bank President Jean-Claude Trichet will follow an interest-rate increase today by signaling the need for further gains in borrowing costs.

“More hawkish comment from Trichet will help the euro, and then gold,'' Mario Innecco, a futures broker at Man Financial Ltd. in London, said today by telephone. “I'm quite positive'' on gold, he said.

Gold for immediate delivery rose $1.08, or 0.2 percent, to $564.03 an ounce as of 9:02 a.m. in London, the highest compared with closing prices since Feb. 9. The metal has gained 9.1 percent this year, after adding 18 percent last year.

The euro traded at $1.1934 against the dollar, from $1.1923 in New York yesterday. Trichet will hold a press conference at 1:30 p.m. London time after the bank's decision.

Among other precious metals for immediate delivery in London, platinum gained $5.50, or 0.5 percent, to $1,054 an ounce. Palladium fell $3.50, or 1.2 percent, to $293, and silver climbed 1 cent, or 0.1 percent, to $9.755.