* Palladium reaches $617.50
* Robust physical demand supports gold prices
* Market expectations of more QE as early as November
(Updates prices)
By Rebekah Curtis
LONDON, Oct 25 (Reuters) - Gold rose more than one percent
on Monday and palladium hit its highest in nearly a decade, as
the dollar fell after weekend comments at the G20 meeting and on
market expectations of further quantitative easing.
Spot palladium <XPD=> rose to $617.50, its highest since
mid-2001, from $586.98 an ounce late in New York on Friday. It
was at $609.05 an ounce at 1308 GMT.
Spot gold <XAU=> rose to $1,344.89 an ounce, off the 2-1/2
week low at $1,315.09 hit last Friday. It was at $1,326.70 late
in New York on Friday.
Analysts said the Group of 20 (G20) finance ministers on
Saturday pointed to a status quo in currency markets, with the
dollar staying pressured due to market expectations for the
Federal Reserve to unveil a second round of quantitative easing
as early as November. []
"This is to do with the fact that the G20 communique failed
to produce anything concrete on the coordinated exchange rates
policy," Andrey Kryuchenkov, analyst with VTB Capital, said of
the dollar's loss and gold's subsequent rise.
"There is still a lot of uncertainty about exchange rates...
(and)... the size and format of the QE," he added.
The dollar fell around 0.7 percent versus a major currency
basket, making dollar-priced metals cheaper for non-U.S.
investors. The U.S. gold futures for December delivery <GCZ0>
rose 1.5 percent to $1,345.5 an ounce.
"The differences still persist between countries as to what
constitutes proper monetary and currency policy," Commerzbank
analyst Daniel Briesemann said. "That means tensions between
different governments will continue and therefore gold should
stay in demand among investors."
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic on QE2 impact on gold and the dollar see:
http://graphics.thomsonreuters.com/F/10/GLD_IRDLR1010.gif
For a graphic on commodity price performances in 2010 see:
http://graphics.thomsonreuters.com/F/10/CMD_PF.html
For a graphic on asset returns since QE2 hints, see:
http://graphics.thomsonreuters.com/F/10/GLB_MKTQEP.html
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
ROBUST PHYSICAL DEMAND
Robust physical demand from India ahead of its important
festival season, as well as from other countries, is likely to
keep gold prices buoyed. []
Concerns on the recovery of the global economy and inflation
due to lax monetary policies have made gold a popular
investment, pushing the precious metal up by a fifth this year,
outpacing copper's 16 percent gain.
BlackRock Inc <BLK.N>, the world's largest money manager,
expected gold prices to rise further due to a lack of world
production growth, increasing appetite among central banks to
hold more gold as a safe-haven investment. []
Silver <XAG=> was at $23.74 an ounce from $23.24 an ounce
and platinum <XPT=> was at $1,699.67 an ounce from $1,667.75 an
ounce.
"It's more or less a dollar story, but it could be
sustainable, there's still a lot of reasons to be long gold -
quantitative easing and the inflation that will come sooner or
later," said Deutsche Bank trader Michael Blumenroth.
(Editing by William Hardy and Alison Birrane)
