Gold edges higher as dollar weakens against euro

By Moming Zhou, MarketWatch

NEW YORK (MarketWatch) — Gold futures rose on Monday, as investors
embraced more risk, pressuring the dollar, lifting stocks and helping
crude-oil futures test new highs for the year above $79 a barrel.

Copper also gained more than 4% before giving back some gains after
China estimated that its economy grew 9% in the third quarter.

Gold for December delivery, the most actively traded contract, rose
$2.60, or 0.2%, to $1,054.10 an ounce on the Comex division of the New
York Mercantile Exchange. The thinly traded October contract also
gained 0.3% to $1,053.50. . . .

The dollar, which has been used as a safe-haven currency, sank further, while the euro rose 0.2% to $1.4942. The dollar index
/quotes/comstock/11j!i:dxy0
(DXY
75.34,
-0.30,
-0.40%)
lost 0.3% to 75.409. See Currencies.

A weaker dollar lifts the price of dollar-denominated commodities and heightens gold’s appeal as a safe asset.

Crude-oil futures rose as much as $79.05 a barrel, a new high for the year.
See Futures Movers.

Gold rose “with oil reaching a new high for the year above $79 a
barrel, and the Federal Reserve signaling interest rates will stay near
record lows for the foreseeable future, the beleaguered greenback fell
to a 14-month low on the dollar index,” said analysts at GoldCore in a
note.

The dollar came under further pressure after the Federal Reserve Bank
of New York clarified it has been testing reverse repurchase agreements
for technical reasons, and that the tests should not be seen as hints
of a tighter monetary policy. See full story.

Separately, Fed Chairman Ben Bernanke called for policy makers to watch
for the restrengthening of unsustainable global imbalances driven by
high levels of Asian exports and low U.S. savings rates as the global
economy rebounds. See full story.

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