Dec. 2 (Bloomberg) -- Gold surged to a record for a second day as investors stepped up purchases to protect their wealth against a slumping dollar. Shares of producers including Newcrest Mining Ltd. also advanced.
Bullion has risen 38 percent this year as the dollar has dropped 8.5 percent against a basket of six major currencies. Central banks, pension funds and individuals have bought gold as a hedge against potential currency debasement and inflation. The precious metal is climbing “like there is no tomorrow,” David Thurtell, an analyst at Citigroup Inc., wrote in a report.
“Gold prices will go up, as will other commodities,” Mark Mobius, chairman of Templeton Asset Management Ltd., said in a Bloomberg Television interview today from Hong Kong. “It’s basically the devaluation of currencies, which is ongoing and will be ongoing for many years to come.”
Spot gold climbed as much as 1.6 percent to $1,215.85 an ounce, and was at $1,214.39 at 1:52 p.m. in Singapore. Gold for February delivery in New York climbed to an all-time high of $1,216.90. Silver advanced to the highest since July 2008.
“It’s really a dollar story,” said Jerry Yoshikoshi, a senior economist with Sumitomo Mitsui Banking Corp. in Singapore. “As long as the U.S. authorities neglect a weak dollar, gold prices remain elevated.”
The Federal Reserve has kept benchmark interest rates close to zero since December in a bid to revive lending after the worst financial crisis since World War II. The U.S. government has boosted spending to combat the recession, pushing the nation’s marketable debt to more than $6.9 trillion.
The Dollar Index, a six-currency gauge that includes the yen, was little-changed today. Against the euro, the U.S. currency traded near a 16-month low.
