By Pham-Duy Nguyen
Jan. 15 (Bloomberg) -- Gold prices rose in New York for the first time this week on speculation worldwide interest rates will remain low, boosting the appeal of the precious metal as an alternative to currencies. Silver also gained.
The European Central Bank today reduced its benchmark rate to 2 percent from 2.5 percent. The Bank of England and the U.S. Federal Reserve had slashed borrowing costs to stimulate growth as the global recession deepens. In 2008, gold rose 5.5 percent, the eighth straight annual gain.
“Gold is moving up against all the currencies,” said Marty McNeill, a trader at R.F. Lafferty Inc. in New York. “All interest rates are falling, and that’s a factor that will help gold work its way higher.”
Gold futures for February delivery rose $4.30, or 0.5 percent, to $813.10 an ounce at 9:26 a.m. on the Comex division of the New York Mercantile Exchange. The price declined 5.4 percent in the previous three sessions.
Silver futures for March delivery gained 5.5 cents, or 0.5 percent, to $10.53 an ounce. The metal slumped 24 percent in 2008.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
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