By Jason Scott
June 24 (Bloomberg) -- Gold, little changed in early Asian trading, may rise as a weaker dollar revives demand for the precious metal as an alternative investment. Silver gained.
The dollar yesterday dropped as much as 1.8 percent versus the euro, the most since May 8, on speculation the Federal Reserve will today signal it intends to refrain from raising interest rates. Gold typically moves inversely to the dollar.
“The more the dollar falls, U.S. consumers will see prices of imports rise and may be prepared to use gold as an inflation hedge,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne.
Bullion for immediate delivery traded at $925.54 an ounce at 8:21 a.m. Singapore time. Gold for August delivery were also little changed at $925.70 on the New York Mercantile Exchange’s Comex division.
Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were unchanged at 1,131.24 metric tons as of June 23, according to the company’s Web site.
Silver for immediate delivery rose 0.4 percent to $13.905 an ounce. Silver has outpaced gold this year, with an ounce of gold now buying about 66.53 ounces of silver, according to data compiled by Bloomberg. That’s down from a high of 84.4 on Oct. 10, which was the most since March 1995.
Among other precious metals for immediate delivery, platinum climbed 0.4 percent to $1,166.50 an ounce. Palladium fell 0.5 percent to $235.50 an ounce.
“The weakness in the dollar is going to have some positive inpacts on commodities,” Francisco Blanch, head of global commodity research at Merrill Lynch & Co., said in an interview with Bloomberg Television today. Still, “There is a chance of dollar strengthening in the near-term.”
To contact the reporter on this story: Jason Scott in Perth at Jscott14@bloomberg.net
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