By Matt Day 
   Of DOW JONES NEWSWIRES 
 

NEW YORK (Dow Jones)--Gold futures ended at another record settlement price Thursday as investors bet that prices will continue to rise amid an uncertain economic recovery and the chance of further easing of U.S. monetary policy.

The most actively traded gold contract, for December delivery, rose $4.20, or 0.3%, to $1,296.30 an ounce on the Comex division of the New York Mercantile Exchange. The benchmark contract has settled at record highs in six of the last eight sessions, buoyed by speculation that the Federal Reserve will flood the market with cash to boost the sagging economic recovery, a move seen devaluing the dollar and enhancing gold's appeal as an alternative asset.

"Given the investment demand base and some of the foreign interest that we've seen [in gold], that demand can only be enhanced by a weaker dollar," said Stephen Platt, analyst with Archer Financial Services.

The precious metal historically trades inversely to the greenback. The dollar was firmer Thursday against some major trading partners after a report of slower-than-expected euro-zone economic growth sent investors fleeing the euro.

But the dollar's rise wasn't enough to seriously weaken refuge demand for gold, said Jimmy Tintle, analyst with Transworld Futures. Strong demand for gold as a hedge against volatility in equities kept gold prices from falling, he said. Gold is frequently used to diversify portfolios, as it isn't closely tied to economic cycles as are many commodities and equities.

Meanwhile, Severstal Gold NV, a unit of Russia's OAO Severstal (CHMF.RS), Thursday agreed to buy Canada-listed gold company Sacre-Coeur Minerals Ltd (SCM.V) for $65 million in a bid to expand into South America.

Gold miners expect high prices to lead to more deals.

Flush with cash from gold's record highs this summer, gold mining companies have made a series of mergers and acquisitions, with deals topping $100 billion so far this year, according to PriceWaterhouseCoopers. Larger mining companies are continuing to buy up smaller producers to boost their reserves, as new sources of gold are scarce and costly to develop.

"I do think you'll see more deals," Chuck Jeannes, Vancouver-based Goldcorp Inc.'s (GG, G.T) chief executive, told Dow Jones Newswires Wednesday. Mining companies "deplete our resources every day. You have to either find new resources or buy them."

Other precious metals settled higher Thursday. Comex December silver settled 15.8 cents, or 0.8% higher, at $21.213 an ounce. Nymex October platinum rose $17.30, or 1.1%, at $1,650.20 an ounce. December palladium climbed $14.95, or 2.8%, to $556.85 an ounce.

 
Settlements (ranges include open-outcry and electronic trading): 
London PM Gold Fix: $1,199.50; previous PM $1,187.50 
Dec gold $1,296.30, up $4.20; Range $1,288.20-$1,297.50 
Dec silver $21.213, up 15.8 cents; Range $20.885-$21.265 
Oct platinum $1,650.20, up $17.3 cents; Range $1,625.30-$1,650.20 
Dec palladium $556.85, up $14.95; Range $535.60-$559.70 
 

-By Matt Day, Dow Jones Newswires; 212-416-4986; matthew.day2@dowjones.com

(Matt Whittaker and Alex MacDonald contributed to this article.)

Source: http://online.wsj.com/article/BT-CO-20100923-710417.html