BLBG: Gold Soars to Highest Since July on Demand for Metals as Haven
Gold jumped to the highest since July on demand for precious metals as a haven amid concern that the U.S. government’s plan to rescue banks will fail to revive the economy. Silver and platinum jumped to four-month highs.
The Standard & Poor’s 500 Index tumbled almost 5 percent yesterday. Treasury Secretary Timothy Geithner ducked questions on toxic debt, illiquid assets and home prices as he rolled out a plan to repair the financial system, analysts said.
“This uncertainty increased risk aversion and continued a flight to a safe haven of gold and platinum investments,” Bayram Dincer, a commodity analyst at Dresdner Bank in Zurich, said in an e-mail.
Gold futures for April delivery rose $27.60, or 3 percent, to $941.80 an ounce at 11:35 a.m. on the Comex division of the New York Mercantile Exchange. Earlier, the price reached $948.20, the highest for a most-active contract since July 23. The metal climbed to a record $1,033.90 on March 17.
Yesterday, investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, jumped 1.5 percent to a record 894.7 metric tons.
“Support will continue to come from investment flows,” said Tom Pawlicki, an analyst at MF Global Ltd. in Chicago.
Silver futures for March delivery gained 44.5 cents, or 3.4 percent, to $13.575 an ounce. Earlier, the metal reached $13.67, the highest since Sept. 26.
Platinum futures for April delivery rose $37, or 3.6 percent, to $1,071.90 on the Nymex. Earlier, the price reached $1,075.40, the highest since Sept. 30.
Fed’s ‘Ambiguity’
“The Federal Reserve’s ambiguity over another of round massive government bailout money being handed out has investors piling into gold and platinum,” Ralph Preston, a commodity analyst with Heritage West Futures Inc. in San Diego, said in an e-mail.
Gold’s rally “sparks trending moves to $950 to $955, as well as holding potential for an extreme spike to $980,” Preston said.
Palladium futures for March delivery climbed $2.85, or 1.3 percent, to $214.85 an ounce. Before today, the price gained 12 percent this year.
Platinum and palladium are used mostly in jewelry and pollution-control devices in cars. Prices tumbled last year as metal consumption by the auto industry plunged.
Gains may be limited should investment demand stall, Miguel Perez-Santalla, a sales vice president at Heraeus Precious Metals Management in New York, said in an e-mail.
“This thing can turn on a dime,” he said. “It is all investment money. There remains to be seen any demand from industry.”
