Gold climbed to a fresh two-month high of $957.50 an ounce in Europe on Friday, extending the previous session’s near 2 percent gains, as investors bought the metal as a hedge against dollar weakness.
Silver prices posted the biggest gains among precious metals, however, climbing to a nine-month peak of $14.79 as investors turned to the metal as a cheaper alternative to gold.
Spot gold was bid at $956.95 an ounce at 1207 GMT, against $953.40 an ounce late in New York on Thursday. U.S. gold futures for June delivery on the COMEX division of the New York Mercantile Exchange rose $6.20 to $957.40 an ounce.
Simon Weeks, director of precious metals at the Bank of Nova Scotia, said the majority of gold’s gains were dollar-related, with investors “buying hard assets as opposed to hard currency”.
“Physical (buying) has been okay, but I expect a big increase in the open interest on the long side on the COMEX,” he added.
The dollar continued its slide on Friday, reaching a five month trough against a basket of currencies as fears over U.S. sovereign ratings accelerated a drive away from the unit.
Ratings agency Moody’s Investor Services said on Thursday it was comfortable with its U.S. rating but that it was not guaranteed forever, while Standard & Poor’s cut its outlook on Great Britain to negative from stable.
Fears over the economic outlook and the financial system fuelling interest in gold as a haven from risk.

Full Story: http://www.guardian.co.uk/business/feedarticle/8520758

Last 5 posts by ETF Daily News

• The Most Expensive ETFs You’ll Never Need - June 8th, 2009
• What Warren Buffett Thinks About ETFs - June 8th, 2009
• National Inflation Association Report: Our Favorite ETFs and ETNs - June 8th, 2009
• How To Stay Afloat Through Your ETF’s Liquidation - June 8th, 2009
• Fink Aspires to No. 1 Fund Manager With Barclays Unit - June 8th, 2009