Gold Rises in Asia as Crude Oil Gain Boosts Inflation Hedge Dec. 26 (Bloomberg) -- Gold rose in Asia after a gain in crude oil boosted the appeal of the precious metal as a hedge against accelerating consumer prices. February-delivery crude added as much as 0.7 percent in after-hours electronic trading on the New York Mercantile Exchange and was at $94.66 a barrel at 2:32 p.m. in Singapore. The contract gained on concern Iraq shipments may be disrupted after the Turkish military attacked bases of Kurdish rebels. "We've had a relatively close relationship between oil and gold in the last few months and part of that has to do also with the currency relationship that oil, gold and the dollar have all tied up together,'' Francisco Blanch, head of Global Commodities Research at Merrill Lynch & Co. in London, in a Dec. 24 Bloomberg Television interview. Bullion for immediate delivery gained $6.59, or 0.8 percent, to $813.59 an ounce at 2:35 p.m. Singapore time. Gold climbed to $845.84 an ounce on Nov. 7, the highest since 1980. Silver for immediate delivery was 1.1 percent higher at $14.56 an ounce. Gold often moves in the opposite direction to the dollar, which traded at $1.4413 per euro at 2:40 p.m. in Singapore, from $1.4402 late in New York yesterday. It was at 114.17 yen from 114.14 yesterday. The relationship between oil, the dollar and gold would probably follow a similar pattern into next year, Blanch said. "Potentially if we're talking about dollar weakness we will see a much stronger gold price and possibly a stronger oil price,'' said Blanch. 'New Highs' Gold was likely to rise to new highs, Michael Lewis, head of commodity research at Deutsche Bank AG in London, said in a Dec. 24 Bloomberg Television interview. "With oil, it's broken through its all-time high in real terms and nominal terms,'' he said. "For gold to do that you need the gold price to go up to $1,500, so I wouldn't be recommending anybody leave this market just yet.'' Seasonal patterns showed the dollar strengthens in January and next month may be a "good time'' for investors to enter the market, Lewis said. Gold for February delivery on the Comex division of the New York Mercantile Exchange was little changed at $816.80 an ounce at 2:40 p.m. Singapore time. In Japan, December-delivery gold added 0.9 percent to 3,014 yen a gram ($821 an ounce) on the Tokyo Commodity Exchange. "If the dollar is falling and you also see an environment where real interest rates in the United States are also moving lower, these are two very constructive things for gold,'' Lewis said. To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net ***
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