Gold Advanced to a Record, Set for a Third Weekly Gain

Gold advanced to a record, set for a third weekly gain, as a weaker dollar and debt concerns boosted the metal’s appeal as an alternative investment. Silver gained to the highest level in 31 years.

Gold for immediate delivery reached an all-time high of $1,512.47 an ounce before trading a $1,508.78 at 4:10 p.m. Seoul time. The metal is up 1.5 percent this week. Futures for June delivery yesterday touched a record $1,509.60 on the Comex in New York. The most-active contract has posted a record 10 times this month. The exchange is closed today in observance of the Good Friday holiday.

“The weak dollar is having the most influence on gold at the moment,” said Chae Un Soo, a Seoul-based trader at Korea Exchange Bank Futures Co. “The market is getting more jittery now that we have sovereign-debt concerns about the U.S. in addition to Europe and the Middle East problems, which increasingly boosts safe-haven demand for gold.”

The dollar slid to the lowest level since August 2008 against a basket of six major currencies yesterday on speculation that the Federal Reserve will be slow to raise borrowing costs. The Dollar Index is little changed today. The Fed has kept the benchmark rate between zero percent and 0.25 percent since December 2008 and pledged to purchase $600 billion in Treasuries through June to stimulate the economy.

Standard & Poor’s this week revised its debt outlook for the U.S. to negative from stable. Violence in the Middle East, sovereign-debt turmoil in Europe and Japan’s nuclear crisis have helped propel bullion 31 percent higher in the past year.

“Overall trade for gold and other precious metals was extremely thin due to the market holiday in the U.S. and U.K.,” said Hiroyuki Kikukawa, general manager of research at IDO Securities Co. in Tokyo.

Silver for immediate delivery climbed as much as 0.6 percent to $46.86 an ounce, the highest price since 1980. The metal has climbed 9 percent this week, heading for a fifth weekly advance. That was the biggest weekly gain since Feb. 18.

Spot palladium fell 0.7 percent to $765 an ounce, while cash platinum was 0.5 percent higher at $1,825 an ounce.

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