| The dollar fell against the euro after an industry survey showed German business confidence unexpectedly rose this month. Gold has climbed 14 per cent this year, rising to a record $1,032.70 an ounce last week as the dollar declined. |
| "We are positive on gold and we think it will retrace to the $1,000 level," Dan Miller, Asia Pacific head of mining and metals at Standard Chartered Bank in Singapore, said. "We think it's going to follow the US dollar relatively closely these days." |
| Gold for immediate delivery rose $9.31, or 1 per cent, to $948.10 an ounce as of 11:10 am in London. The metal's gain this year compares with a 13 per cent increase in the UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials. Gold has had a correlation of 0.62 against the euro-dollar exchange rate in the past year, compared with 0.46 a year earlier. |
| A figure of 1 would indicate the two move in lockstep. |
| Lower interest rates by the Federal Reserve since September have helped accelerate gold's gains as investors sought a haven from declines in the dollar. Gold also becomes more attractive when rates fall because competing assets such as bonds offer lower yields. |
| Overnight Lending Interest-rate futures indicate a 66 per cent chance the Fed will lower the overnight lending rate 0.25 percentage point to 2 per cent on April 30, compared with an 18 per cent chance a week ago. The federal funds rate was at 5.25 per cent in September. |
| "The likelihood is that the Fed will cut rates further and that's negative for the dollar and positive for gold," said James Moore, an analyst at London-based TheBullionDesk.com. |
| Silver for immediate delivery rose 18 cents, or 1 per cent, to $18.135 an ounce. Platinum gained $11, or 0.6 per cent, to $1,993.50 an ounce and palladium increased $5, or 1.1 per cent, to $455.50 an ounce. |
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