By Matt Whittaker
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Gold futures remained near the historic $1,300 mark Monday as participants continued to want the metal as a refuge investment and currency hedge.
The most-actively traded gold contract, for December delivery, was recently up $1.80, or 0.1%, at $1,299.90 an ounce on the Comex division of the New York Mercantile Exchange.
"It's safe-haven buying," said Bob Haberkorn, senior market strategist with Lind-Waldock in Chicago. "Europe's not out of the woods."
Gold is often considered a haven investment because it isn't as linked to economic cycles as other commodities or economic proxies like equities.
Thus, part of the support for gold recently has been fears about continued European sovereign debt problems and how they might affect the worldwide economic recovery.
A weakening dollar--after last week's Federal Reserve statement about continuing to stimulate the U.S. economy--has also been boosting the metal.
The weaker greenback makes dollar-denominated gold less expensive for buyers using other currencies, which can help demand.
The ICE Futures U.S. Dollar Index was recently down 0.08%.
Also, some consider gold to be an alternative currency, and this type of buying has been a boon to the metal as governments have ramped up spending to prop up their economies during the downturn, sparking fears of future inflation.
Support for gold is coming amid "lack of faith in paper currencies right now," Haberkorn said.
The euro had declined earlier against the dollar after Moody's Investor Service downgraded the debt of Anglo Irish Bank, and a weekly German newspaper reported European Commission officials were worried about the health of several regional banks there.
The common currency regained ground against the buck, however, as investors think the Federal Reserve will soon act to kick-start a sagging economy.
-By Matt Whittaker, Dow Jones Newswires; 212-416-2139; matt.whittaker@dowjones.com
Source: http://online.wsj.com/article/BT-CO-20100927-707528.html
