BLBG: Gold Fluctuates in London as Investment Demand May Increase
July 22 (Bloomberg) -- Gold fluctuated near $1,185 an ounce in London on speculation investors will buy the metal as a means to protect wealth.
The dollar declined against the euro before U.S. reports today forecast to show initial jobless claims rose and existing home sales declined. Federal Reserve Chairman Ben S. Bernanke said yesterday that the economic outlook remains “unusually uncertain.” Stress-test results on European banks will be released tomorrow.
“We see support coming from the potential that safe haven is demanded,” Tom Pawlicki, an analyst at MF Global Holdings Ltd. in Chicago, said today in a report. “Markets aren’t content to sit back and watch the Fed do nothing more. This should be bearish for risk.”
Gold for immediate delivery added 20 cents to $1,185.25 an ounce at 9:26 a.m. in London. Prices swung between a loss of 0.3 percent and a gain of 0.2 percent. Bullion for August delivery was 0.6 percent lower at $1,184.80 on the Comex in New York.
Gold is up 8 percent this year and set a record $1,265.30 on June 21 as investors sought to protect their wealth against the European debt crisis and on concern that the global economy may slow. European regulators are examining the strength of 91 banks to determine whether they can survive potential losses on sovereign-debt holdings.
Bernanke said yesterday that policy makers are prepared to act as needed to aid growth. He will testify to the House Financial Services Committee today.
‘Big Run’
“Gold had a big run last month as the European debt crisis drove a flight to safety, so it has been consolidating those gains in the past few weeks,” said Liu Mingliang, a Sichuan- based analyst at Chengdu Brilliant Futures Co. “There’s little conviction to either buy or sell gold at the moment, so the market will take its direction from other markets.”
Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were unchanged at 1,308.13 metric tons yesterday, according to the company’s website. Global holdings of the metal by ETFs were little changed at 2,071.7 tons yesterday, according to Bloomberg data from 10 providers.
Silver for immediate delivery in London added 0.3 percent to $17.705 an ounce. Platinum was 0.3 percent lower at $1,511.50 an ounce, and palladium was down 0.5 percent at $446.27 an ounce.
--Editors: John Deane, Dan Weeks.
To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net.
