Gold rose for a second day on signs that investors are buying the precious metal as an alternative to a slumping dollar.
The U.S. currency fell for a second day against the euro as Greece moved closer to completing its debt swap. European Central Bank President Mario Draghi said inflation will probably breach the bank’s 2 percent limit this year even as the economy stalls. The ECB kept its benchmark interest rate at a record low of 1 percent. The MSCI All-Country World Index (MXWD) jumped as much as 1 percent
“It finally looks as if Greece will pull through, and the sentiment overall is positive,” Rick Trotman, a senior research analyst at MLV & Co. in New York, said in a telephone interview. “The risk-on mentality seems to be back for now.”
Gold futures for delivery in April rose 0.8 percent to $1,696.50 an ounce at 9:30 a.m. on the Comex in New York. Prices advanced 0.7 percent yesterday.
Bullion assets in exchange-traded products expanded for a sixth straight session yesterday to a record 2,407.021 metric tons, now valued at about $131 billion, according to data compiled by Bloomberg.
The possibility of a third economic stimulus from the Federal Reserve is the key to determining gold’s next move, UBS AG said in an e-mailed report today.
Silver futures for May delivery increased 0.5 percent to $33.75 an ounce on the Comex. The commodity’s 20 percent gain this year through yesterday is the biggest among precious metals.
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