Gold Settles Near $1,309 as US Dollar Weakens

CNBC

Gold settled mostly flat Thursday, as the dollar weakened and the Federal Reserve stood ready to pump more cash into the U.S. economy to stave off double-dip recession.

Having hit its 11th record high in 13 trading sessions, gold was on course for a 5 percent gain for the month and the likelihood the Federal Reserve will pump more cash into the financial system to support the economy lifted silver as well.

Spot gold reached a record high of $1,315.80 an ounce and was last bid around $1,308, against $1,308.80 late on Wednesday.

U.S. gold futures for December delivery settled down $0.70 to end at $1,309.60.

Two measures of U.S. regional business activity beat expectations and a drop in weekly jobless claims supported the view that economic activity picked up in the third quarter, which boosted the dollar against a basket of major currencies and in turn weighed on gold.

However, this was unlikely to change the view that the world's largest economy is flagging, which bolstered gold's safe-haven status.

"In the United States, you've got a gradual grind on the economic side, so low GDP growth, the Fed likely to keep rolling over its balance sheet for a while and not increasing interest rates," said Bank of America-Merrill Lynch analyst Michael Widmer.

"In that environment, you have a lot of uncertainty and people are looking to increase their gold holdings."

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