World Business

Gold reaches 2010 highs, dollar dips

(Xinhua)
Updated: 2010-05-01 10:45

CHICAGO: Gold futures on the COMEX Division of the New York Mercantile Exchange hit 2010 highs on Friday as the decline of dollar boosted gold's demand, and investors worried about worsening eurozone debt crisis switched to gold in a flight to safe-haven. Silver and platinum both rose.

The most active gold contract for June delivery surged $11.9, or 1 percent, to finish at $1,180.7.

Euro gained strength as George Papandreou, Greek prime minister warned about new spending cuts and tax increase on Friday, and hopes that a bailout plan that could offer Greece a reported 120 billion euros ($158.88 billion) over three years and 45 billion euros in loans this year would be hammered out within days also lifted euro, and reduced the value of dollar. Investors worried about the viability of fiat currencies have flocked to gold for the purpose of safe- haven.

The US economy continued to grow in the first quarter of this year by 3.2 percent, as consumer spending expanded, the increase which marked the third straight quarter of growth, suggested that the US economy is recovering from the worst recession since the 1930s. The brighter prospect of US economy has triggered a sell- off of US dollar, and increased gold's appeal as an alternative assets.

July silver rose 6.0 cents to $18.639 per ounce. July platinum was up $11.4 to $1,745.1 an ounce.