* Dollar wilts on expectations U.S. rates will remain low
* Gold mining shares soar 5 pct, hit 15-month high
* Chinese passenger car sales surge in October, PGMs up
(Recasts, updates comments, closing prices, market activity,
adds NEW YORK to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Nov 9 (Reuters) - Gold hit a record high
above $1,110 an ounce on Monday as the dollar tumbled on
expectations of low U.S. interest rates, boosting bullion's
appeal as a hedge against a falling U.S. currency.
The precious metal extended last week's gains of nearly 5
percent, when fund buying took it to record highs after India's
central bank bought 200 tonnes of gold from the International
Monetary Fund and the dollar weakened further.
Nicholas Brooks, head of research and investment strategy
at ETF Securities, said that gold rallied on expectations of
continued monetary easing following a G20 meeting over the
weekend.
"Investors have become concerned about the outlook for
paper currencies and also for inflation. The natural move in
this kind of environment is into gold," Brooks said.
Equities, oil and other commodities also rallied on Monday.
The S&P 500 index rose for a sixth straight session as the
dollar index fell to a 15-month low after the Group of 20
pledged to keep emergency stimulus spending in place.
Spot gold <XAU=> was at $1,100.85 an ounce at 2:08 p.m. EST
(1908 GMT), against $1,096.30 in New York late Friday. Earlier
in the session, bullion reached a record high of $1,110.85 an
ounce
U.S. December gold <GCZ9> settled up $5.70 at $1,101.40 an
ounce on the COMEX division of the NYMEX.
Deutsche Bank trader Michael Blumenroth said some inflation
fears are starting to be felt, while the weak dollar remains
the key driver of the market. "People are expecting more
weakness there," he said.
"In general, the rally looks healthy," he added.
For a chart showing correlation of gold prices and
inflation expectations, click on:
http://graphics.thomsonreuters.com/119/GLD_TPSS1109.gif
Weakness in the U.S. dollar tends to benefit all
dollar-priced assets, as it makes them cheaper for holders of
other currencies.
Gold mining stocks as a whole rose to their highest level
since July 2008. Gold BUGS index <.HUI> climbed nearly 5 pct,
led by gains in shares of gold producers such as Buenaventura
<BVN.N> , Agnico-Eagle <AEM.TO> and Goldcorp <GG.TO>.
In the official gold sector, the Russian central bank's
first deputy chairman, Alexei Ulyukayev, said on Monday the
central bank may buy gold from the state repository, Gokhran.
[]
GOLD RISES IN ALL CURRENCIES?
Traders noted that gold's strength in currencies other than
the U.S. dollar suggested gains could be resilient.
Gold priced in euros <XAUEUR=R> held near its highest since
March at 740.69 on Monday, while sterling-denominated gold
<XAUGBP=R> hit 662.48 pounds, within reach of eight-month
highs.
Among other precious metals, silver <XAG=> was at $17.49 an
ounce versus $17.38, platinum <XPT=> at $1,353 an ounce versus
$1,342.50, and palladium <XPD=> at $330 against $327.50.
Both platinum and palladium held near the multimonth highs
they hit in late October as traders bet strength in gold prices
and an expected recovery in demand from carmakers, the major
consumers of the platinum group metals, will buoy prices.
Data released on Monday showed China's passenger car sales
surged 75.8 percent in October from a year earlier, extending
the explosive growth of recent months as government incentive
policies continued to lure customers. []
Close Change Pct 2008 YTD
Chg Close % Chg
US gold <GCZ9> 1101.40 5.7 0.5 884.3 24.6
US silver <SIZ9> 17.480 0.105 0.6 11.295 54.8
US platinum <PLF0> 1367.20 19.00 1.4 941.50 45.2
US palladium <PAZ9> 335.95 5.25 1.6 188.70 78.0
Prices at 2:09 p.m. EST (1909 GMT)
Gold <XAU=> 1100.65 4.35 0.4 878.20 25.3
Silver <XAG=> 17.48 0.10 0.6 11.30 54.7
Platinum <XPT=> 1352.50 10.00 0.7 924.50 46.3
Palladium <XPD=> 330.00 2.500 0.8 184.50 78.9
Gold Fix <XAUFIX=> 1106.75 -1.75 -0.2 836.50 32.3
Silver Fix <XAGFIX=> 17.68 15.50 0.9 14.76 19.8
Platinum Fix <XPTFIX=> 1355.00 5.00 0.4 1529 -11.4
Palladium Fix<XPDFIX=> 333.00 1.50 0.5 365.0 -8.8
(Reporting by Frank Tang and Jan Harvey)
