November 25: Gold hits new high on India talk, weaker dollar

Source: Marketwatch

New York -- Gold futures rose to a record high near $1,188 an ounce Wednesday, getting a fresh lift after a news report said India may buy more gold from the International Monetary Fund and the U.S. dollar slid to a key level against the euro. Also providing support, holdings in the biggest gold exchange-traded fund rose again. Climbing for the ninth straight session, gold for December delivery rose as high as $1,187.50 an ounce. The contract ended up $21.20, or 1.8%, at $1,187 an ounce on the Comex division of the New York Mercantile Exchange

Analysts said speculation that India could buy more gold, combined with a drop in the dollar, drove the day's action. India's Financial Chronicle newspaper reported that the nation's central bank may buy the 201.3 tons of gold the IMF is selling on terms now being negotiated. Such a purchase, if realized, would follow India's acquisition of 200 metric tons of IMF gold for $6.7 billion. That was almost half the total sales volume of 403.3 metric tons that the IMF's executive board approved in September. The island nation of Mauritius followed India with a small purchase of IMF bullion. Other central banks, including in China, are also expected to add to their gold reserves. "Strong investor demand is being buoyed by the structural shift we're seeing in the official sector," said Suki Cooper, a precious metals analyst for Barclays Capital. See full story.