MW: Gold extends rise to third day on continued uncertainty
Trade group World Gold Council forecasts increased demand for bullion
By Claudia Assis & Kate Gibson, MarketWatch
SAN FRANCISCO (MarketWatch) -- Gold futures gained for a third straight session on Wednesday as a rebound in global stock markets prompted short-term speculative interest in the metal and other commodities.
Gold futures for June delivery advanced $16.90, or 1.4%, to $1,214.70 an ounce on the Comex division of the New York Mercantile Exchange. Gold for August delivery, now the most active contract, rose $16.70, or 1.4%, to $1,216.30 an ounce.
The contract on Tuesday inched up $4 to finish at $1,198 an ounce.
"Investors are still steadily buying into the market, there's still a great deal of concern" about a pause in the global recovery and gold continues to benefit from these worries, said James Moore, an analyst at Thebulliondesk.com in London.
Prices also got a boost from a World Gold Council report forecasting rising demand for the metal on the sovereign risk concerns and physical demand from Asia.
As a measure of growing interest in gold as an investment, holdings in the SPDR Gold Trust (GLD 118.49, +1.13, +0.96%) , the largest exchange-traded fund backed by gold, posted a fresh record as of Tuesday.
The ETF reported 1,267 metric tons (1,396 short tons) in gold in the trust, an increase from the 1,237 metric tons reported Monday.
Gold and other commodities held onto gains after the Commerce Department said U.S. orders for durable goods rose 2.9% in April on stronger demand for airplanes and communications equipment. The increase exceeded the expected 2.5% rise forecast by economists surveyed by MarketWatch.
The advances accelerated after new-home sales climbed nearly 15% in April, the Commerce Department said Wednesday. Read full story about new-home sales.
In a report published Wednesday, the World Gold Council forecast that increased investment and demand from jewelry makers would support gold. Demand fell 11% during the first three months of 2010 compared to the prior quarter.
"Despite increasing gold prices, consumers in China and India will continue to drive market growth, particularly in jewelry," wrote Aram Shishmanian, chief executive officer of the industry group in the report.
"In Western markets, the uncertain outlook and sovereign risk fears will add further impetus to growth in investment as investors seek to protect wealth," Shishmanian said.
Stocks advanced in Europe following a late U.S. rebound on Tuesday, that saw the Dow industrials (DJIA 10,092, +48.59, +0.48%) regain most of a nearly 300-point drop by the close.
