Gold leaps ahead, its biggest gain of the yearBy The Associated Press , Associated Press
Jul. 22, 2013 5:31 PM ET
Gold prices rose by more than 3 percent Monday, their biggest gain of the year.
The move was driven by physical demand from Asia, as well as investors betting that the Federal Reserve will continue its intervention in the U.S. economy, analysts said. Gold for December delivery jumped $43.30 to $1,337.30 per ounce.
Gold prices fell for much of the spring, as investors betted that the Fed was close to ending its economic stimulus programs. That changed last week, after comments from Fed Chairman Ben Bernanke made them think otherwise. Monday marked the third day in a row of higher gold prices.
"Bernanke's clarity last week echoed with Asian buyers," Peter Hug of Kitco Metals wrote in a report Monday.
Though the Fed programs are meant to boost the economy, they also make investors worry about inflation — and that makes many of them buy gold as an alternative.
The dollar fell against other major currencies around the world. Since gold is sold in dollars, a cheaper dollar makes gold less expensive as well.
The gain in gold also boosted the stocks of mining companies like Newmont Mining, which rose nearly 6 percent, and Kinross Gold, which climbed more than 8 percent.
Silver, which tends to move in the same direction as gold but is often more volatile, rose by an even bigger percentage. It jumped 5 percent, up $1.049 to $20.509 per ounce. Copper and platinum both rose more than 1 percent. September copper was up 4.5 cents to $3.185 per pound. October platinum rose $16.80 to $1,448 per ounce. September palladium edged up 70 cents to $750.45 per ounce.
The price of U.S. benchmark crude dropped $1.14 to $106.91 a barrel on the New York Mercantile Exchange. Wholesale gasoline lost 7 cents to $3.06 a gallon, heating oil lost 2 cents to $3.07 a gallon, and natural gas dipped 11 cents to $3.68 per 1,000 cubic feet.
Wheat and corn both fell by less than 1 percent. Wheat lost 4.75 cents to $6.5975 per bushel. Corn lost 2.75 cents to $4.98 per bushel. Soybeans rose just more than 1 percent, up 14.5 cents to $12.885 per bushel.