Gold may climb for a sixth day in London, the best streak since April, as concerns over Europe’s debt crisis and slowing economic growth spur demand for the metal as a protection of wealth.
A European bailout fund may have to be doubled to 1.5 trillion euros ($2.1 trillion) to cover a crisis in Italy, the European Central Bank said, German newspaper Die Welt reported. The Financial Times said European leaders may accept a Greek default on some bonds. U.S. employers added 18,000 workers in June, the fewest in nine months and below the 105,000 estimated by economists in a Bloomberg survey.
“Concerns over unresolved debt issues in the monetary union continue to haunt investors,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said today in a report. “A prolonged period of ultra-low currency yields and persistently dovish tone from the Federal Reserve will likely be supportive” for gold.
Immediate-delivery gold rose as much as $3.75, or 0.2 percent, to $1,547.90 an ounce, the highest price since June 23. It was at $1,546.35 by 9:17 a.m. in London. Gold for August delivery was 0.3 percent higher at $1,546.90 an ounce on the Comex in New York.
Gold is up 8.8 percent in 2011 after climbing the past 10 years, the longest run of gains in at least nine decades. Europe’s debt crisis helped bullion reach a record $1,577.57 on May 2. The metal climbed to all-time highs of 1,094.21 euros and 969.66 British pounds today.
Greek Bonds
The Financial Times cited unidentified senior officials as saying European leaders are prepared to accept that Greece should default on some of its bonds as part of a new bailout plan for the country that would put its total debt levels on a sustainable footing.
China’s inflation climbed to a three-year high of 6.4 percent in June, exceeding the 6.2 percent median estimate in a Bloomberg News survey of economists and higher than the government’s full-year target of 4 percent. The ECB on July 7 increased the benchmark interest rate to the highest since March 2009 to fight inflation.
“Inflation will continue to be a big problem globally and this will keep gold prices supported,” Chi Duofeng, an analyst at Bohai Futures Co., said by phone from Changchun, China. “We remain bullish on gold for at least the rest of the year as the global macro-economic picture isn’t encouraging.”
Silver for immediate delivery fell 0.7 percent to $36.4538 an ounce in London. Palladium slipped 0.9 percent to $771.25 an ounce. Platinum was down 0.4 percent at $1,729.50 an ounce.
To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
