Daily Gold Update

Source: Bloomberg

London— Gold rose in New York and London as a decline by the dollar increased the metal�s appeal as an alternative investment. Silver also advanced. The U.S. Dollar Index, a gauge of the currency�s value versus six counterparts, fell as much as 0.8 percent to the lowest since Dec. 18. Gold, which typically gains when the dollar weakens, touched a 14-week peak before closing yesterday and silver reached its highest in almost 10 months. Investors continue �to track moves in the dollar, the key factor driving gold,� Pradeep Unni, an analyst at Richcomm Global Services in Dubai, said in a note. �As optimism grows that the worst of the economic downturn is over,� the correlation between gold and the dollar has returned, he said.

Gold futures for August delivery rose $1.90, or 0.2 percent, to $981.90 an ounce on the New York Mercantile Exchange�s Comex division at 8:43 a.m. local time. The contract earlier fell as much as 1 percent. Bullion for immediate delivery in London gained $5.16, or 0.5 percent, to $980.43. The metal slipped to $973.50 an ounce in the morning �fixing� in London, used by some mining companies to sell production, from $981.75 at yesterday�s afternoon fixing. Gold briefly traded above $1,000 in the U.K. capital on Feb. 20, the first time the metal had breached that price since March 2008, when it climbed to a record $1,032.70. See full story.