BLBG: Gold Rises in London After Selloff Revives Demand; Silver Gains
Gold rose for the first day this week in London as some investors and manufacturers bought the metal after its slump to a one-month low. Silver also advanced.
Gold dropped 4.4 percent in the past two days and yesterday fell to $891.33 an ounce, the lowest since Feb. 9. Assets in the ETFS Physical Gold fund traded on European stock exchanges climbed 0.3 percent to a record 2.37 million ounces yesterday, according to figures from its manager ETF Securities Ltd.
“There is some bargain hunting and we have seen some industrial interest for a change,” said Wolfgang Wrzesniok- Rossbach, head of marketing and sales at Hanau, Germany-based refining company Heraeus Holding GmbH. “This is a natural reaction to the huge drop we’ve seen in the last few days.”
Gold for immediate delivery climbed $4.81, or 0.5 percent, to $902.96 an ounce at 11:45 a.m. local time.
The metal advanced to more than $1,000 an ounce last month for the first time since March 2008 as investors sought an alternative to declining equities and amid speculation the global economy would continue to worsen. Gold has climbed 2.6 percent this year as the U.K.’s FTSE 100 Index of stocks declined 16 percent. The FTSE dropped 0.3 percent today after gaining 4.9 percent yesterday.
“People don’t trust the stability of the financial system or the economy,” Wrzesniok-Rossbach said.
Assets in the ETF Securities gold funds are rising even as investment in the SPDR Gold Trust traded in New York held unchanged at 33.08 million ounces as of yesterday. The stock trades under the symbol GLD.
Executive Order
“We’re seeing quite a lot of demand from the U.S.,” said Hector McNeil, head of sales and marketing at ETF Securities in London. “People think GLD is too big. They want to spread their risk. The hard-nosed gold traders are afraid the U.S. could privatize gold as they did in the 1930s through the process of sequestration.”
U.S. President Franklin D. Roosevelt issued an executive order in 1933 requiring people to deliver all their gold to banks in exchange for paper currency and for the banks to deliver the gold to the Federal Reserve, according to Peter L. Bernstein’s “The Power of Gold,” published in 2000.
Among other metals for immediate delivery, silver gained 8 cents, or 0.6 percent, to $12.71 an ounce, platinum climbed $10.50, or 1 percent, $1,052 an ounce and palladium rose 75 cents to $198.75 an ounce.
