Gold rises abover $870 on rising oil, gloomy retail
 

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Gold rises to above $870 on rising oil, gloomy retail




By Moming Zhou, MarketWatch
Last update: 2:13 p.m. EST Dec. 26, 2008
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NEW YORK (MarketWatch) -- Gold futures rose nearly 3% Friday to above $870 an ounce as investors bought the metal on the heels of rising oil prices and sinking retail sales.


In thin trading, gold for February delivery ended up $23.20, or 2.7%, at $871.20 an ounce on the Comex division of the New York Mercantile Exchange. Gold finished the week up 4%. For the year, it has also risen 4% so far.
Crude-oil futures jumped 5.4% to above $37 a barrel Friday, following their 9.3% slump in the previous session. Rising oil prices tend to push up gold prices as they increase the metal's appeal as a hedge against inflation. See Futures Movers.
Aggressive price discounting by U.S. retailers was apparently to no avail. Data released Friday by MasterCard Inc.'s SpendingPulse unit showed total retail sales, excluding automobiles, fell by 5.5% in November over the year-earlier period and by 8% in December through Christmas Eve. See full story.
"As more bad financial news hit markets and industry and retailing, gold will confirm the resumption of its long-term upward trend," said Julian Phillips, editor at GoldForecaster.com.
The nearby December contract, which expires Dec. 29, was also higher, ending at $870.40 an ounce. Open interest, or the number of outstanding contracts for December delivery, stood at 212 as of Friday, or 21,200 ounces, according to Comex data.
Gold inventories held by Comex for futures delivery stood at 2,832,883 ounces as of Wednesday, unchanged from a day ago, according to the latest data from the exchange.
In currencies trading, the dollar was lower against the euro but was trading higher against the British pound and the Japanese yen. The dollar index (DXY: US Dollar Index Future - Spot Price


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<IMG class=pixelTracking height=1 width=1 border=0>GDX 32.25, +1.66, +5.4%) gained 4.2% to $31.87. http://i.mktw.net/mw3/News/greendot.gif
Moming Zhou is a MarketWatch reporter based in New York.