Gold May Extend Biggest Rally in Two Months as Dollar Declines

Jan. 5 (Bloomberg) -- Gold, little changed in Asia, may extend its biggest rally in two months as the dollar declines, boosting demand for the precious metal.

The U.S. currency may weaken against a basket of six counterparts after Federal Reserve Governor Elizabeth Duke said “moderate” economic growth is likely to warrant low interest rates for an “extended period.” Gold rallied 24 percent in 2009 as investors hedged against a declining dollar.

Oil prices rose above $77

Oil prices rose above $77 a barrel Monday in Asia amid a weaker U.S. dollar and an improving global crude demand outlook for next year.

Benchmark crude for December delivery was up $1.02 to $77.37 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. On Friday, the contract fell to as low as $75.57, the cheapest since Oct. 15, before settling down 59 cents at $76.35