BLBG: Gold Climbs to Seven-Month High in London as Economy May Worsen
Gold rose to its highest in almost seven months in London as investors bought the precious metal to preserve their wealth on speculation the global economy will worsen. Silver climbed to a five-month high.
Stocks in Europe and Asia retreated on concern banks face lower debt ratings and further losses as the economic slump deepens. Bullion has climbed 33 percent since October as governments are lowering interest rates and spending trillions of dollars to combat the recession. Physical demand has pushed holdings in exchange-traded funds to records.
“The very big uncertainties in the stock market and economy are driving investors into gold and precious metals,” said Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany. “We are seeing the first attempt at reaching the $1,000 mark this week.”
Bullion for immediate delivery advanced as much as $21.49, or 2.3 percent, to $963.24 an ounce and traded at $962.88 by 9:41 a.m. local time. That’s the highest since July 22. April futures rose $21.10, or 2.2 percent, to $963.40 in electronic trading on the Comex division of the New York Mercantile Exchange.
Gold reached a record $1,032.70 in London in March. Some investors are buying precious metals on speculation government stimulus packages will lead to inflation, Fertig said.
Obama’s Signature
President Barack Obama today signs into law a $787 billion economic stimulus package, and Treasury Secretary Timothy Geithner last week pledged as much as $2 trillion in financing for programs aimed at spurring new lending.
The Treasury will likely borrow a record $2.5 trillion this fiscal year ending Sept. 30, according to Goldman Sachs Group Inc. The Group of Seven’s finance ministers said after talks in Rome on Feb. 15 that a “severe” economic downturn will persist for most of 2009.
Among other metals for immediate delivery in London, silver gained 2.1 percent to $13.9037 an ounce, the highest since Aug. 29. Platinum added $14, or 1.3 percent, to $1,079 an ounce, and palladium was 1.5 percent higher at $219.75 an ounce.
