BS: Gold Advances to Seven-Week High on Economic Recovery Concerns
Aug. 25 (Bloomberg) -- Gold advanced to a seven-week high in New York as concern that the economic recovery is stalling spurred demand.
Stocks in Europe and Asia fell and U.S. equities headed for the fifth straight decline. A government report today showed manufacturing is slowing. Before today, gold had gained 13 percent this year, touching a record $1,266.50 an ounce in June.
“The fear is palpable,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois. “The economy is really faltering. People are worried about the stock market. Money has to go somewhere and it’s going to gold.”
Gold futures for December delivery rose $6.40, or 0.5 percent, to $1,239.80 ounce at 9:45 a.m. on the Comex in New York. Prices earlier advanced to $1,243, the highest price since July 1.
U.S. Treasuries gained, pushing the yield on the 10-year note to the lowest level in 19 months.
“Gold can continue to compete with Treasuries for investment as opportunity costs of holding gold are low due to falling interest rates,” said Tom Pawlicki, an analyst at MF Global Ltd. in Chicago.
Gold demand expanded 36 percent to 1,050.3 metric tons in the second quarter, from 769.6 tons a year earlier, as investors boosted purchases of bullion-backed funds, the World Gold Council said today. Purchases of gold in exchange-traded funds were 291.3 tons, the second-highest quarterly total on record, the producer-funded group said.
Silver futures for December delivery rose 31.2 cents, or 1.7 percent, to $18.74 an ounce on the Comex.
Silver held in ETF Securities Ltd.’s European and Australian exchange-traded products rose 3.8 percent to a record 30.058 million ounces yesterday, according to the company’s website.
Platinum futures for October delivery rose $1.20, or 0.1 percent, to $1,518.90 an ounce on the New York Mercantile Exchange while palladium futures for September delivery rose $4.25, or 0.9 percent, to $488.50 an ounce.
--With assistance from Nicholas Larkin in London. Editors: Daniel Enoch, Michael Arndt.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
