(For more on the gold bear market, see EXT5.)
Aug. 14 (Bloomberg) -- Gold rose for the fifth time in six sessions as the dollar’s drop boosted demand for an alternative investment. Speculation mounted that purchases will increase in China, the world’s second-biggest consumer of the metal.
The Bloomberg Dollar Index, a gauge against 10 major currencies, fell for the first time in three days. The China Gold Association said on Aug. 12 that purchases climbed 54 percent to 706.4 metric tons in the first half from a year earlier. Demand surged 87 percent for bars and 44 percent for jewelry demand.
“The weakness in the dollar is helping gold,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “The market sees Chinese demand growing as the economy continues to improve.”
Gold futures for December delivery rose 1 percent to settle at $1,333.40 an ounce at 1:41 p.m. on the Comex in New York. Trading was 35 percent below the average in the past 100 days for this time, according to data compiled by Bloomberg. The price has climbed 4 percent since Aug. 6
Gold has fallen 20 percent this year. Some investors lost faith in the commodity as a store of value amid low U.S. inflation. This week, India, the top buyer, raised the import tax on the metal to contain a record current-account deficit. Demand for bars and jewelry surged following the price slump.
Silver futures for September delivery rose 2.1 percent to $21.787 an ounce on the Comex. The price advanced for the fifth straight session, the longest rally since early March.
On the New York Mercantile Exchange, platinum futures for October delivery added 0.4 percent to $1,505.20 an ounce. Palladium futures for September delivery climbed 0.2 percent to $740.35 an ounce.
--With assistance from Nicholas Larkin in London. Editors: Thomas Galatola, Patrick McKiernan