Gold gains most in three weeks as weaker dollar may spur demand

Gold climbed the most in three weeks in London as a weaker dollar may accelerate demand for the metal as an alternative asset. Palladium rose the most in a month.

The euro advanced as much as 1.2 percent against the dollar, the most since Nov. 11. Gold and the U.S. currency tend to move inversely. Holdings in exchange-traded products backed by bullion increased to a record 2,351 metric tons on Nov. 25, according to data compiled by Bloomberg.

“Gold today has to do largely with the dollar pullback,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said by phone. “Support for gold is well intact.”

Bullion for immediate delivery gained 1.7 percent to $1,712.54 an ounce by 11:57 a.m. in London. Prices rose as much as 2.1 percent, the most since Nov. 7. February-delivery futures advanced 1.6 percent to $1,715.80 on the Comex in New York.

Gold rose to $1,714 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,688.50 at the afternoon fixing on Nov. 25.

Prices also advanced as the MSCI All Country World Index of shares climbed after 10 declines in a row and futures indicated U.S. equity benchmarks will rise when trading begins in New York. U.S. retail sales rose to a record for the Thanksgiving weekend and Germany urged treaty changes to calm markets.

Bullish Wagers

A report due today may show fewer bets on higher gold prices after a 2 percent gain in the week ended Nov. 15, Commerzbank AG analyst Carsten Fritsch said. That might improve bullion’s outlook by signaling the metal isn’t near a top, he said. Last week’s Thanksgiving holiday in the U.S. delayed the release of the figures.

“A declining net-long position would suggest that selling pressure would decline,” Fritsch said by phone from Frankfurt. “We see it as negative for prices when the market is overly bullish.”

Silver gained 2.5 percent, the most since Nov. 22, to $32.04 an ounce. Platinum climbed 1.8 percent, the most since Nov. 3, to $1,558.25 an ounce. Palladium advanced 4.7 percent, the most since Oct. 24, to $594.50 an ounce.

–Bloomberg News–