BLBG: Gold Futures Advance in New York as Decline to a 5-Week Low Prompts Buying
Gold gained for a second day in New York as a drop to a five-week low spurred some investors to buy the metal as a protection of wealth and alternative to currencies.
Bullion dropped as much as 4.4 percent since last week and touched $1,490.80 an ounce on June 27, the lowest price since May 20. Greek Prime Minister George Papandreou clinched enough votes to pass the first part of an austerity plan aimed at meeting European Union aid requirements and staving off a default.
“When gold gets to a reasonable level, we do see the buyers come in,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said today by phone. “Just because of the Greece vote, it doesn’t mean that Greece has solved all its problems. All of the drivers for gold remain.”
Gold for August delivery rose $6, or 0.4 percent, to $1,506.20 an ounce by 9:50 a.m. on the Comex in New York. Immediate-delivery gold was 0.2 percent higher at $1,504.75 in London.
Gold is up 6 percent in 2011 after climbing the past 10 years, the longest run of gains in at least nine decades in London. Europe’s debt crisis helped bullion futures reach a record $1,577.40 on May 2. Greece is trying to avoid the euro area’s first default.
Papandreou is now on track to secure a bill setting out the strategy for a 78 billion-euro ($112 billion) package of budget cuts and asset sales that is the condition for further rescue funds. The vote, overshadowed by a 48-hour strike, became the target of protests outside Parliament that saw the police fire tear gas at demonstrators.
European Confidence Declines
European confidence in the economic outlook dropped to the lowest level in eight months in June, the European Commission in Brussels said today. An index of executive and consumer sentiment in the 17-nation euro region fell to 105.1 from 105.5 in May. That’s the lowest since October.
Silver for September delivery rose 1.8 percent to $34.25 an ounce in New York. Palladium for September delivery gained 0.9 percent to $741.95 an ounce. Platinum for October delivery was up 1.4 percent at $1,717 an ounce.
To contact the reporter for this story: Nicholas Larkin in London at nlarkin1@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
