Report form Bloomberg Nov 23, 2007
Note the last couple of parapgrahs
Source: http://www.bloomberg.com/apps/news?p...
**********************

Gold Has Biggest Weekly Gain Since July 2006 on Dollar's Slump

By Millie Munshi

Nov. 23 (Bloomberg) -- Gold jumped 3.3 percent, capping the biggest weekly gain since July 2006, as the dollar's decline to a record against the euro and climbing energy costs sparked demand for the metal as a hedge against inflation.

The price of gold has surged 29 percent this year, and the dollar is down 10 percent to the lowest ever against a basket of six currencies, including the euro and the yen. Crude oil closed above $98 a barrel, and heating oil climbed to a record.

``With the dollar hitting all-time lows, it proves supportive for gold,'' said William O'Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey. ``The basic uptrend in gold is going to continue.''

Gold futures for December delivery gained $26.10 to $824.70 an ounce on the Comex division of the New York Mercantile Exchange. The metal surged 4.8 percent this week, the most since the week ended July 14, 2006. The percentage gain today was the biggest for a most-active contract since Feb. 21.

Gold-company shares also climbed. The Philadelphia Gold & Silver Index, which tracks 16 of the world's largest gold and silver producers, rose 4.1 percent today. The gauge is up 24 percent this year.

Barrick Gold Corp., the biggest producer of the metal, climbed C$1.53, or 3.7 percent, to C$42.88 at 2:55 p.m. local time on the Toronto Stock Exchange. The shares are up 19 percent this year.

Euro at Record

The dollar dropped to a record $1.4967 against the euro, the weakest since the single European currency's debut in 1999. Gold has rallied during five of the past six bear markets for the dollar.

The dollar index on ICE Futures U.S., formerly the New York Board of Trade, measures the U.S. currency against the weighted values of the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc. The index touched 74.484 today, the lowest ever.

Crude oil for January delivery rose 89 cents, or 0.9 percent, to $98.18 a barrel, a record close on the Nymex. The contract reached $99.29, the highest intraday price ever, on Nov. 21. Heating oil climbed to a record $2.7181 a gallon today.

``The fact that crude came back provided support,'' said Stephen Platt, a futures strategist at Archer Financial Services Inc. in Chicago. ``There seems to be good investment demand from overseas which supports the market'' for gold, he said.

Gold also gained on heightened speculation that the Federal Reserve will lower borrowing costs. Interest-rate futures indicate a 98 percent chance the Fed will lower its benchmark lending rate by a quarter point to 4.25 percent at its December meeting.

The central bank lowered the benchmark rate by 0.25 percentage point to 4.5 percent on Oct. 31, driving gold to a 27-year high of $848 on Nov. 7.

Silver futures for December delivery climbed 31.5 cents, or 2.2 percent, to $14.735 an ounce. The metal is up 14 percent this year.

``Anytime gold goes up, it's good for silver too,'' O'Neill of Logic Advisors said.