Dec. 4 (Bloomberg) -- Gold posted the biggest jump in seven weeks as the dollar pared gains and commodity prices advanced, led by crude oil, renewing demand for an inflation hedge.
The Bloomberg U.S. Dollar index traded little changed after rising as much as 0.3 percent against a basket of currencies. The Standard & Poor’s GSCI Spot Index of 24 raw materials rose as much as 0.6 percent, the third straight advance, and crude oil in New York climbed to a five-week high.
“We saw gold take off as the dollar began its slide,” Frank Lesh, a trader at FuturePath trading in Chicago, said in a telephone interview. “Also, the strength in commodities continues to support gold and with some support coming in from technical buying.”
Gold futures for February delivery rose 2.2 percent to settle at $1,247.20 an ounce at 1:59 p.m. on the Comex in New York, the biggest gain since Oct. 17.
Prices earlier touched $1,210.80, the lowest since July 5, as figures from the ADP Research Institute showed U.S. companies boosted payrolls by 215,000 in November, more than economists forecast. The government will release official jobs data on Dec. 6.
Gold has tumbled 26 percent this year, heading for the first annual drop in 13 years, as some investors lost faith in the metal as a store of value. Minutes of the Federal Reserve’s October meeting released Nov. 20 showed that policy makers expected an improving economy will allow the central bank to trim its debt purchases in coming months. The Fed next meets on Dec. 17-18. Bullion rose 70 percent from December 2008 to June 2011 as the central bank pumped more than $2 trillion into the financial system.
Silver futures for March delivery climbed 4 percent to $19.83 an ounce in New York, the biggest jump for a most-active contract since Sept. 19. Earlier, it touched $18.89, the lowest since July 8.
On the New York Mercantile Exchange, platinum futures for January delivery gained 1.5 percent to $1,376 an ounce. Palladium futures for March delivery added 2 percent to $729.25 an ounce.
--With assistance from Phoebe Sedgman in Melbourne and Nicholas Larkin in London. Editors: Millie Munshi, Thomas Galatola