BLBG: Gold Tops $900 on Haven Demand as Equities Drop in Europe, Asia
Gold prices rose to a three-month high, climbing past $900 an ounce in both New York and London for the first time since October, as global equity markets tumbled, boosting demand for a safe harbor. Silver also jumped.
Europe’s Dow Jones Stoxx 600 Index slumped as much as 2.6 percent to the lowest since April 2003 before rebounding. Tokyo’s Nikkei 225 sank 3.8 percent. This week, the MSCI World Index of shares slid 4.1 percent, while gold rose 6.7 percent.
“There is a lot of fear,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois, “Things are bad here, but they are worse” in Europe, he said.
Gold futures for February delivery climbed $37, or 4.3 percent, to $895.80 an ounce on the Comex division of the New York Mercantile Exchange, the biggest gain since Dec. 10. Earlier, the price reached $903.80, the highest for a most- active contract since Oct. 10.
Gold rose 5.5 percent last year, the eighth straight gain, as the Standard & Poor’s 500 Index fell 38 percent.
“We are back to the same situation, where money has nowhere to go and gold remains the safe haven of choice,” Miguel Perez-Santalla, a sales vice president at Heraeus Precious Metals Management in New York, said in an e-mail.
The rally may stall around $900, Perez-Santalla said. “The industry that consumes the metal cannot support that price.”
Gold for immediate delivery jumped as much as 5.4 percent, to $903.34 an ounce, in London. The metal, which last topped $900 on Oct. 10, traded at $894.54 at 7:51 p.m. local time.
Silver futures for March delivery rose 57.5 cents, or 5.1 percent, to $11.94 an ounce. The price climbed 6.5 percent this week.
Platinum, Palladium
Platinum futures for April delivery rose $23.10, or 2.5 percent, to $958 an ounce on Nymex. The price gained 0.5 percent this week and is up 1.8 percent this month.
Palladium futures for March delivery climbed $12.30, or 6.7 percent, to $197.10 an ounce. The price rose 5.7 percent this week and is up 4.5 percent from last month.
Platinum and palladium are used mostly to make pollution- control devices for cars and trucks.
“Actual consumption is close to nil, and until the economy starts to turn around, this will be the trend, so I wouldn’t bank on any rally” in platinum and palladium, Perez-Santalla said.
