Gold continues record rally

There is no stopping the gold bulls, as the US dollar continued to be under pressure amid prospects for a fragile economic recovery in the world's biggest economy. A weak greenback tends to bolster the appeal of gold as a safe haven investment. The precious metal had gained 5% last week on fund buying after the Reserve Bank of India (RBI) bought 200 tons of gold from the International Monetary Fund (IMF) and the dollar weakening further. Gold has gained more than 25% in 2009, driven by persistent weakness in the US currency, and growing doubts over its future as the world's reserve currency.
China's Prime Minister Wen Jiabao exhorted the US to keep its deficit in control to stabilize the dollar exchange-rate, according to media reports. China is the largest foreign holder of US Treasurys. Since early March, the US dollar index, which tracks the dollar's value against a basket of major rivals, has fallen about 15%, in part due to the Federal Reserve's loose monetary policy. Meanwhile, the IMF signaled that record low US interest rates are funding global carry trades and the dollar is still overvalued as concerns mount that new financial imbalances are forming.
Some countries expressed concern that the increasingly weak dollar might hamper recovery. US Treasury Secretary Timothy Geithner reiterated his belief in a strong dollar. Responding to the IMF’s comment that the yuan was "significantly undervalued", China’s central bank said that its foreign-exchange policy would take into account "capital flows and major currency movements".