02/07/07: Weak dollar, terror worries push up gold

Gold futures have climbed to a more than one-week high, with gold for August delivery reaching $657.50 an ounce on Monday, MarketWatch reports.

This was the highest level for the contract since June 22nd, helped along by terrorism concerns and a dollar that was suffering against the euro. These factors made the precious metal a more attractive investment hedge.

The greenback was pushed down by speculation that the European Central Bank might hike interest rates faster than the US Federal Reserve.

"Some of the support for the dollar has eroded and that's helping gold," FuturePath Trading LLC's Frank Lesh told Bloomberg. "The Fed is going to make no moves on interest rates and the ECB is still talking tough."

Silver futures moved up in tandem with gold, with silver for September delivery rising some 1.5 per cent on the Comex today. This helped to stem a fall of 3.6 per cent for silver futures so far this year.