Gold Gains as Dollar May Fall

Gold advanced in Asia on expectation the U.S. dollar may fall before an industry report today that will show U.S. manufacturing shrank, boosting the appeal of the precious meal as an alternative asset.

Bullion has gained 41 percent in the past year, spurred by the dollar's 14 percent decline against the euro over the same time. The U.S. currency traded near a three-week low versus the euro before government data this week that may show U.S. employers cut jobs for a sixth month.

Bullion for immediate delivery was up 0.2 percent at $927.43 an ounce at 3:56 p.m. in Singapore. Silver was little changed at $17.48 an ounce.

Crude oil futures traded in New York were up 0.7 percent at $141.32 a barrel at 3:57 p.m. Singapore time after reaching a record $143.67 a barrel yesterday.

Hedge-fund managers and other large speculators increased their net-long position in New York gold futures in the week through June 24, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 153,538 contracts on the Comex, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 2,348 contracts, or 2 percent, from a week earlier.

Gold for August delivery gained 0.04 percent to $929 an ounce in after-hours electronic trading on Comex at 3:59 p.m. Singapore time.

Gold for June 2009 delivery was little changed at 3,185 yen a gram ($936 an ounce) on the Tokyo Commodity Exchange at 4:59 p.m. local time. Gold for December traded in Shanghai was down 0.3 percent at 205.55 yuan a gram ($932 an ounce)., Bloomberg
7/1/2008 6:25:17 AM