June 25 (Bloomberg) -- Gold futures climbed for the sixth straight session as the dollar’s drop and escalating violence in Iraq boosted demand for the metal as an alternative investment.
The dollar fell to a five-week low against a basket of 10 currencies after the U.S. economy in the first quarter contracted more than analysts estimated. Iraq’s Prime Minister Nouri al-Maliki rejected calls to relinquish power and allow the formation of a “salvation” government to counter militants.
Gold headed for the second straight quarterly gain, the longest rally since 2011, partly as mounting tensions in Iraq and Ukraine spurred demand for the precious metal as a haven. In the three months ended March 31, prices rose on concern that the economy in the U.S. was stalling.
“The dollar weakness is keeping gold supported,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “There is also some safe-haven buying because of Iraq.’
Gold futures for August delivery rose 0.1 percent to settle at $1,322.60 an ounce at 1:34 p.m. on the Comex in New York. Yesterday, the price reached $1,326.60, the highest for a most- active contract since April 15.
The metal rose 3.3 percent last week as the Federal Reserve policy makers signaled that interest rates will remain close to zero percent for a considerable time. The central bank’s bond purchases were reduced by another $10 billion to $35 billion a month from $85 billion in 2013.
Nations including Russia, Kazakhstan, Mexico and Portugal added gold to reserves in May, while Ukraine was among countries that reduced holdings, according to data on the International Monetary Fund’s website.
Silver futures for September delivery rose 0.4 percent to $21.171 an ounce on the Comex. Yesterday, the price reached $21.225, the highest since March 18.
On the New York Mercantile Exchange, platinum futures for October delivery rose 0.1 percent to $1,474.30 an ounce. Palladium futures for September delivery advanced 0.3 percent to $833.25 an ounce.
In South Africa, the world’s three largest platinum producers said workers are returning in large numbers the day after an agreement was signed with the labor union that went on strike for five months over pay
The country is the top producer of platinum and trails only Russia in palladium output.
Platinum and palladium prices will be ‘‘well supported” with markets facing “sizable” deficits in 2104, Citigroup Inc. has said in a report.
--With assistance from Nicholas Larkin in London.