Dollar decline supports metals prices

Precious metals prices saw gains in New York as the US dollar dropped to new record lows against the euro and weakened against other currencies.

Gold for December delivery was $16.50 higher to $787.50 per troy ounce not only on the dollar’s current weakness, but also on the possibility that Middle East investors will buy gold rather than US Treasury bonds if tensions continue to escalate there.

December silver gained 38 cents to $14.28 per troy ounce, while January platinum jumped $15.40 to $1,469.10 per troy ounce.

European efforts to limit greenhouse gas emissions supports demand for platinum, which is used in the manufacture of vehicle emissions-control devices.

Meanwhile among base metals, December copper added 5 cents to $3.54 per pound in New York while three-month copper on the London Metal Exchange was up $105 to $7,870 per tonne, or $3.57 per pound, even though LME inventories were up 2,725 tonnes on the session for an 18 percent gain since the beginning of the month.

Despite worries that US demand could decline due to the housing slump, most analysts expect demand from China will continue to grow as new data showed that Chinese imports of copper and copper alloys was up 93 percent in the first nine months of this year compared to last year’s numbers.