BLBG:Gold May Climb as Greek Debt Crisis Is ‘Long-Term Headache,’ Growth Slows
Gold may climb as investors seek to preserve their wealth against the sovereign-debt crisis in Europe and slowing growth in the U.S. and China.
Immediate-delivery gold was little changed at $1,530.70 an ounce at 11:52 a.m. in Singapore. Gold for August delivery was also little changed at $1,531.40 an ounce. Cash silver declined 0.9 percent to $35.85 an ounce.
European Central Bank President Jean-Claude Trichet and German Finance Minister Wolfgang Schaeuble are at odds over investors’ role in the second Greek rescue in 14 months. U.S. retail sales probably fell in May for the first time in 11 months as car buying eased, according to a survey of economists ahead of a June 14 report. A separate report tomorrow may show China’s industrial production slowed.
“Europe’s debt crisis remains a long-term headache and we continue to believe that gold has to move much higher from the current level,” said Hwang Il Doo, a Seoul-based senior trader at KEB Futures Co.
Unless a deal can be struck to guarantee Greece’s financing needs for the next 12 months, the International Monetary Fund has threatened to withhold its share of what remains of Greece’s original 110 billion-euro ($159 billion) bailout. Thirteen of 19, or 68 percent, traders, investors and analysts surveyed by Bloomberg said bullion will rise this week. Five predicted lower prices and one was neutral.
Concern about faster inflation, Europe’s debt crisis, a weakening dollar and fighting in Libya boosted gold to a record $1,577.57 on May 2. The price has gained 7.7 percent this year after climbing for the past 10 years, the longest run of gains for the precious metal in at least nine decades.
Hedge Funds
Hedge-fund managers and other large speculators increased their net-long position in New York gold futures in the week ended June 7, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions outnumbered short positions by 198,708 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 6,934 contracts, or 4 percent, from a week earlier. Long positions are bets on higher prices, while short positions are the reverse.
Spot palladium gained 0.3 percent to $815 an ounce, while platinum was little changed at $1,830.25 an ounce.
To contact the reporter on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
