While you were sleeping: Gold tops US$1,000, greenback falls, IMF upbeat

Wednesday 9th September 2009

Gold topped US$1,000 an ounce as the US dollar fell to its weakest level this year and investors bet inflation will reappear, stoking the appeal of the precious metal.

Gold reached US$1,009.70 an ounce on the New York Mercantile Exchange, edging toward the record US$1,033.90 reached in March last year. Metals and crude oil also gained as the dollar fell and stocks advanced.

The dollar fell to $1.4504 per euro from $1.4332. It earlier touched $1.4535, the lowest since December. The greenback slipped to 92.21 yen from 93.08. The euro rose to 133.77 yen from 133.39.

The Dollar Index, which tracks the greenback against a basket of six major currencies, fell 1% to 77.22.

Oil futures rose 4.6% to US$71.17 in New York as the dollar weakened and as traders anticipated this week’s meeting of Organization of Petroleum Exporting Countries ministers in Vienna, which is to set production targets for the cartel.

Stocks rose in the US and Europe as the rally in commodities lifted resources companies and after International Monetary Fund managing director Dominique Strauss-Kahn said global recovery may come sooner than expected.

"We are seeing the end of the tunnel, but we are still in crisis," he said in the interview in Il Sole 24 Ore newspaper. The worst of the crisis “is almost certainly behind us.”

The Standard & Poor’s 500 Index rose 0.9% to 1025.39 and the Dow Jones Industrial Average gained 0.6% to 9497.34. The Nasdaq Composite advanced 0.9% to 2037.77.

Aluminium producer Alcoa Inc. gained 3.5% to US$12.60 and oil producer Chevron Corp. rose 2.2% to US$70.48. General Electric Co. led gains on the Dow, surging 4.5% to US$14.50 after JPMorgan Chase recommended the stock as a ‘buy.’

In Europe, the Dow Jones Stoxx 600 gained 0.3% to 237.89.

Among regional benchmarks, the UK’s FTSE 100 rose 0.3% to 4947.34, after government figures showed manufacturing output climbed 0.9% in July, three times as much as forecast.

Germany’s DAX 30 rose 0.3% to 5481.73 and France’s CAC 40 gained 0.2% to 3660.96.

BHP Billiton, the world’s largest mining company, rose 2.6% and Rio Tinto, the third-largest resources company, gained 3.6% after Goldman Sachs Group raised its forecast for industrial metals.

Copper gained 2.8% to US$2.9470 a pound in New York and may climb more than a fifth by the end of 2010, according to Goldman Sachs analyst Jeffrey Currie.

STMicroelectronics NV, Europe’s largest computer chip maker, rose 2.5% as prices of memory rose.

Deutsche Telekom gained 1.9% and France Telecom rose 1.8% after the phone companies agreed to merge their mobile-phone operations in the UK, creating that country’s cell-phone company.

US consumer credit tumbled in July, according to Federal Reserve data, suggesting access to loans is still restrictive and job insecurity is deterring households from borrowing.

Consumer credit fell by US$21.6 billion to US$2.5 trillion, the sixth monthly decline.

Businesswire.co.nz

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