Gold may climb in Forex Accounts

Gold may climb in Forex Accounts on increased demand for an alternative asset as central banks including the U.S. Federal Reserve maintain low interest rates to try to sustain the economic recovery.

Immediate-delivery bullion rose as much as 0.2 percent to $1,417.40 an ounce and was at $1,415.45 at 12:11 p.m. in Seoul. The February-delivery contract fell 0.5 percent to $1,415.70 an ounce on the Comex in New York after a record settlement yesterday of $1,422.90.

The Federal Reserve has kept borrowing costs low and bought bonds to boost growth. Precious metals advanced last year as the European Union bailed out Greece and Ireland, with gold rallying 30 percent, the 10th straight annual gain. The immediate- delivery price reached a record $1,431.25 an ounce on Dec. 7.

Assets in exchange-traded products backed by gold gained 17 percent in 2010. Holdings rose 1.5 metric tons to 2,098.72 tons yesterday, according to data from 10 providers.

Hedge-fund managers and other large speculators increased their net-long position in New York futures by 9,364 contracts, or 5 percent, in the week ended Dec. 28 from a week earlier, according to U.S. Commodity Futures Trading Commission data.

The Dollar Index, which gauges the greenback’s value against six counterparts including the euro and the yen, was unchanged today after gaining 0.2 percent yesterday. Precious metals typically move inversely to the U.S. currency.