Gold Heads for Biggest Weekly Gain in 2 Months as Dollar Falls

By Pham-Duy Nguyen

Nov. 21 (Bloomberg) -- Gold rose, heading for the biggest weekly gain since September, as the dollar weakened, boosting the appeal of the precious metal as an alternative investment.

The dollar fell as much as 0.8 percent against a weighted basket of six major currencies. U.S. stock futures indicated a market rebound from the lowest level in 11 years and the Reuters/Jefferies CRB Index gained for the first time this week.

``The dollar will start to soften once the global liquidation panic is over,'' said Adrian Day, president of Adrian Day's Asset Management in Annapolis, Maryland. ``The positive factors for gold are longer term. The massive dollar creation will lead to a dollar decline.''

Gold futures for December delivery rose $22.90, or 3.1 percent, to $771.60 an ounce at 9:24 a.m. on the Comex division of the New York Mercantile Exchange. A close at that price would leave gold up 3.9 percent this week, the biggest gain for a most-active contract since the week ended Sept. 19.

Silver futures for March delivery rose 44.1 cents, or 4.9 percent, to $9.49 an ounce on Comex.

Platinum futures for January delivery gained $27.80, or 3.5 percent, to $817.90 an ounce on Nymex. Palladium for March delivery rose $4.35, or 2.4 percent, to $185.40 an ounce.

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

Last Updated: November 21, 2008 09:27 EST