Oct. 21, 2009, 12:45 p.m. EDT
By Laura Mandaro & Nick Godt, MarketWatch
SAN FRANCISCO (MarketWatch) -- Gold futures turned higher Wednesday as the U.S. dollar slid to a fresh 14-month low against the euro, breaching a key psychological level and making hard assets more attractive.
Gold for December delivery rose $1.60 an ounce, or 0.2%, to $1,060.10 an ounce. The thinly traded October contract gained $2.40 an ounce, or 0.2%, to $1,060.2.
Bullion had slipped in early U.S. trading as the dollar was only modestly lower.
But the greenback, which has been the dominant force in precious metals trading recently, deepened its slide as U.S. stocks headed higher.
These trends in what's known as risk appetite, or investor demand for equities, commodities and currencies from countries with higher interest rates, have knocked off more than 7% of the dollar index /quotes/comstock/11j!i:dxy0 (DXY 74.97, -0.59, -0.79%) this year. A weak dollar makes gold, often viewed as a currency that holds value when paper currencies falter, more valuable.
Prominent in currency trading Wednesday, the euro rose to $1.50, a psychologically important level that Jon Nadler, a senior analyst with Kitco Bullion Dealers, said is a "pivot point that may force more language from policymakers" on the strong dollar. The level "has obviously been good for gold." See Currencies.
Other precious metals also turned higher. December silver tacked on 13 cents, or 0.67%, to $17.69 an ounce. January platinum, the most active contract for the metal, gained $15.70, or 1.2%, to $1,372 an ounce. December palladium rose $2.45, or 0.2%, to $340.10 an ounce.
Copper for December delivery gained 7 cents, or 2.2%, to nearly $3 a pound.
Also buoying metals, crude-oil futures rose to their highest level of the year, touching $80.70 a barrel, helped by a report of a smaller-than-expected build in U.S. inventories and the dollar's slump.
Last week, the benchmark gold contract gained 0.3% and briefly topped $1,070 an ounce, a new intraday high.
Ahead, the Fed will release its Beige Book of economic anecdotes from across the country at 2 p.m. Eastern.
"In the latest edition, the Beige Book noted that 'credit standards ranged from unchanged to tighter in most Districts,'" said Benjamin Reitzes, analyst at BMO Capital Markets, in a note.
"That assessment might improve with underlying financial conditions," he said. "Meantime, expect commercial real estate to remain a source of weakness across the country."
The S&P 500 Index /quotes/comstock/21z!i1:in\x (SPX 1,096, +4.50, +0.41%) rose 0.4% to 1,095.
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