NEW YORK (Dow Jones)--Gold futures continued their upward march Tuesday, hitting a two-month high on worries about the strength of the economic recovery.
The most actively traded gold contract, for December delivery, rose $8.60, or 0.7%, to $1,247.80 an ounce on the Comex division of the New York Mercantile Exchange, the highest price for the benchmark contract since June 30.
"We're back to fear and apprehension" in the wider economy, said George Gero, vice president with RBC Capital Markets Global Futures in New York. Gold prices have climbed since late July on worries about an economic downturn amid a stream of largely disappointing economic data.
Concerns about the fragile U.S. recovery continue to pressure international equities markets, sending investors seeking safe-haven assets, analysts at Dublin-based bullion dealer GoldCore wrote Tuesday in a note to clients.
Gold isn't as closely tied to economic cycles as many commodities and is sometimes bought as a refuge investment on the belief that it will outperform other assets during economic turmoil. Fears of a double-dip recession and the fallout from the euro-zone debt crisis propelled gold to record highs in June.
Dennis Gartman, editor and publisher of the Gartman Letter, said gold prices shouldn't make any dramatic moves ahead of this weekend's U.S. Labor Day holiday. "We see no reason to buy gold to protect either against inflation or deflation," he wrote.
Meanwhile, the chief executive of Pan African Resources (PAF.LN) said Tuesday that gold should trade on the low end of its recent range in the coming year, holding between $1,000 an ounce and $1,200 an ounce. Gold has traded above $1,000 an ounce since October 2009.
"We would obviously be happy if gold prices continued to go up, but we do believe prices are set to stay in this range in the next year," Jan Nelson, Pan African's chief executive, told Dow Jones Newswires. The company Tuesday reported a 29% rise in gross revenue from gold sales in the year ended June 30.
-By Matt Day, Dow Jones Newswires; 212-416-4986; matthew.day2@dowjones.com
