Gold rises to $980 as dollar sinks to new lows

Gold gained nearly one per cent yesterday as a struggling dollar and firm oil prices prompted investors and speculators to build fresh trading positions.The metal rose to $980.30/$981.00 an ounce by 1408 GMT from $971.00/$971.80 late in New York on Tuesday, when it fell to a low of $964.35 on a dollar rally after global central banks announced plans to boost liquidity in financial markets.

“Clearly the dollar has been the primary driver,” said Daniel Hynes, metals strategist at Merrill Lynch. “The outlook is still very positive, although we are going to continue to see little bouts of weaknesses as people take profits.”

“But we are still expecting the dollar to come under increasing downward pressure and believe the $1,000-an-ounce mark will be reached pretty soon,” he added.

Divergent paths

The dollar fell broadly and neared a record low against the euro as strong euro zone economic data renewed focus on the divergent paths of European and US interest rates…MORE

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