Concerns over Europe’s sovereign debt problems has increased the appeal of the precious metal as an alternative investment.
A fresh worldwide exodus from risky assets has sent gold prices near record high even as other commodities such as crude oil and copper declined. Silver prices rose near the highest level since March 2008.
Concerns over Europe’s sovereign debt problems has increased the appeal of the precious metal as an alternative investment.
Spot gold gained as much as 0.2% to US$1,258 an ounce and was at US$1,257.90 by 1:05 p.m. in Tokyo. The price touched US$1,259.80 yesterday, close to a record US$1,265.30 reached June 21.
Gold has jumped 15% this year and is set for its 10th annual gain as investors seek protection against financial turmoil in Europe and the prospect of slowing economic growth in key regions like the US and China.
Gold for December delivery was nearly unchanged at US$1,258 an ounce on the Comex in New York after settling at a record US$1,259.30 yesterday.
Silver for immediate delivery rose 0.6% to US$19.9012 an ounce after touching US$20.015 yesterday, the highest level since March 2008.
Platinum declined 0.2% to US$1,552.75 an ounce, falling for a second day, while palladium climbed 0.2% to US$522.25 an ounce, the first gain in three days.
US and European markets fell yesterday after a report from the Wall Street Journal suggested that Europe’s much hyped “stress tests” weren’t tough enough and that the strength of region’s financial system remains suspect.
The euro suffered after the German Banking Association said that the country’s 10 biggest lenders may need another €105bn of additional capital.
Germany's Die Zeit reported late on Monday that banks could be required to hold a Tier 1 capital level of 9% under new rules dubbed Basel III, potentially rising to 12% in boom years in order to build reserves to pay for a downturn.
The Federal Association of German Banks had estimated that the country's ten largest lenders could need as much as 105 billion euros (US$135bn) of extra capital under planned Basel rules.
Meanwhile, gold holdings in 10 exchange-traded products rose 0.2% yesterday, close to a record set on Sept. 1.
The yen, which reached the highest value since June 1995 versus the dollar yesterday, gained versus all 16 major counterparts on higher demand for Japan’s currency as a refuge.
The Swiss franc traded at 1.2838 per euro from 1.2825 yesterday when it climbed to 1.2811, the highest since the 16- nation currency was introduced in 1999.
Greek bonds plunged yesterday, pushing the yield on the 10-year security up 28 basis points relative to German bunds to 942 basis points. A default by Greece could trigger the collapse of banks with large sovereign-bond holdings.
Japan’s bonds rose for a second day as data showed China bought more Japanese debt than it sold for a seventh-straight month.
Corn contract for December delivery dropped for the first time in five days, losing as much as 0.4% to US$4.6425 a bushel on the Chicago Board of Trade, after yesterday climbing to US$4.69, the highest price for the most-active contract since June 11, 2009. It traded at US$4.655 a bushel at 11:27 a.m. Singapore time.
Crude oil futures for October settlement slipped as much as 46 cents, or 0.6%, to US$73.63 a barrel in electronic trading on the New York Mercantile Exchange, and was at US$73.76 at 11:36 a.m. Singapore time. Yesterday, it fell 51 cents, or 0.7%, to US$74.09. Oil prices have lost 7% this year.
The three-month copper contract on the London Metal Exchange fell as much as 0.8% to US$7,569 a metric ton and traded at US$7,594.50 at 10:19 a.m. in Singapore.
Copper for December delivery on the Shanghai Futures Exchange lost as much as 0.6% to 59,320 yuan (US$8,726) a ton, before trading at 59,520 yuan.
Coffee jumped to a 13-year high of US$1.9355 a pound in New York yesterday on falling inventories and concern that too much rain would hurt crops in Brazil and Colombia.
