BD: Gold price climbs as recession forecasts worsen
Gold and silver advanced on rising demand for a store of value after the International Monetary Fund projected the global economy to contract this year.
The IMF forecast a 1.3% decline in the world economy, compared with a 0.5% expansion estimated in January, and said growth will be slower next year than previously expected. Some investors buy precious metals as a safe harbor in times of economic turmoil.
"What is supporting gold is the continued uncertainty in the global economy," John Gross, the president of J-E Gross & Co, a metals-industry consulting company in Cranston, Rhode Island, said in an e-mailed comment. "We are in the midst of a ‘sea change’ where gold is the safe haven for investors."
Gold futures for June delivery gained $9.80, or 1.1%, to $892.50 an ounce on the New York Mercantile Exchange’s Comex division and was headed for a weekly gain. Last week, the most-active contract slid 1.7%, the fourth- straight drop and the longest losing stretch since August.
Silver futures for May delivery jumped 24.5 cents, or 2%, to $12.305 an ounce on Comex. The price has tumbled 31% in the past year, while gold is down 3.5%.
The IMF projected growth of 1.9% next year, down from 3% estimated in January.
