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Currency concerns push gold to record

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Bloomberg News

Published: October 8, 2009

NEW YORK - Gold climbed to a record for a second day in New York and London on mounting concern that currencies will devalue, spurring demand for the precious metal as a preserver of wealth.
Futures in New York touched $1,049.70 an ounce, the highest ever. Gold priced in euros, yen and pounds also gained. The metal is up 18 percent this year, heading for the ninth straight annual gain.

The dollar slumped 6 percent against six major currencies since the end of 2008 as the United States kept interest rates near zero and government debt surged on spending aimed at ending the recession.

"People are moving to gold as the asset of last resort," said Philip Gotthelf, president of Equidex Brokerage Group in Closter, N.J. "The printing of money and the abandonment of the dollar have taken the smart people over to precious metals."

The metal may be too expensive for some investors, and the dollar's strength Wednesday may limit further advances, said Frank Lesh, a trader at FuturePath Trading LLC in Chicago.

"Don't expect gold to make new highs every day," Lesh said.

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