Gold climbs near $1,200 an ounce as Dubai debt fears ease
NEW YORK (CNNMoney.com) — Gold hit record highs near $1,200 an ounce Tuesday, as dollar weakness and easing of Dubai debt fears helped the precious metal continue recovering from Friday’s losses.
By 7:05 a.m., U.S. gold futures for December delivery were up $13 to $1,194.10 an ounce after reaching $1,199.30.
Gold prices had fallen about 5% Friday on continued concerns about the state-run investment company of Dubai requesting a postponement of $60 billion in debt.
But on Tuesday, reports said Dubai World was in talks over $26 billion of its debt, easing worries it would default on the total balance. That relief translated into a blow for the dollar, as increased risk appetite pushed the U.S. currency lower.
A weaker greenback tends to boost gold, as it and other commodities are priced in dollars around the world.
The dollar also pared gains against the yen after the Bank of Japan said it will inject more liquidity into the financial system while holding rates at 0.1%.
November 2009 was a golden month. Gold prices have risen more than 34% in 2009 so far. The metal was $890 an ounce on Jan. 2, and it fell to $818.90 on Jan. 15.
The next month saw a rapid rise, and gold prices closed at $1,004.70 per ounce by Feb. 23. But prices sank to $878.90 on April 7 and did not cross the $1,000 level again until Sept. 14.
Gold prices have marched upward since that time, despite brief dips in September and October. Since the start of November, prices have risen steadily.