Weak U.S. Dollar Spurs Gains for Gold and Silver as an Alternative to the Greenback

Gold and silver are taking advantage of the U.S. dollar’s decline to a two-week low against the euro and other major currencies. Gold futures are back on the rise and silver is reaching its highest level in six weeks.

In New York trading today, gold prices were poised for a weekly gain with futures for December delivery climbing 0.3 percent to $1,733.50 per ounce. Also advancing 0.3 percent, silver futures for March delivery reached $33.53 per ounce.

The weakness of the U.S. dollar is spurring demand for gold and silver as an alternative to the greenback. According to data compiled by Bloomberg, holdings of exchange-traded products that are backed by gold rose to a new record level of 2,605.3 metric tons on November 21. A report published by the U.S. Mint office showed demand for gold coins picking up with 67,000 ounces of American Eagle coins sold so far this month, compared with 59,000 ounces throughout October.

Better than expected reading in the German business confidence index, which rose for the first time in 8 months, and optimism that the Eurogroup finance ministers will agree on the next tranche of aid to Greece at their meeting on Monday, November 26, are giving additional impetus to the euro’s recent rally against the U.S. dollar. The single currency once again has its eye on the $1.30 mark with an intraday high at $1.2989.

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