SYDNEY (MarketWatch) — Gold futures headed toward a seventh straight day of gains after rising in electronic trading Wednesday, as European contagion fears lingered and supported investment demand.
Gold for August delivery GC1Q +0.45% added $5.10, or 0.3%, to $1,567.40 an ounce on the Comex division of the New York Mercantile Exchange during Asian trading hours.
Earlier in North American trade, gold broke through a previous settlement record of $1,557.10 an ounce, set on May 2.
The gains were stronger for silver, with the September contract SI1U +2.30% adding 75 cents, or 2.1%, to $36.38 an ounce.
Precious metals have benefitted from safe-haven buying on mounting concern that Europe’s sovereign-debt crisis will spread beyond Greece.
Late Tuesday, Moody’s Investor Service downgraded Ireland’s debt to speculative or “junk” status, sparking a selloff in U.S. stocks. Read more about Ireland.
European debt concerns “are certainly driving gold back up to test its old record highs,” said David Combe from Commodity Broking Services in Sydney.
However, he added that rising strength in U.S. dollar would cap further gains.
“Unless there is a new frightener, we might see it finding resistance. I can’t see that there is anything immediate that would see it want to punch above that old high,” Combe said.
Silver prices, meantime, remain around 30% off record-highs.
“Silver’s long-term price ratio between gold and silver is a lot wider than it normally is, and we should see silver want to catch up with gold, or gold come down to a more normal ratio level,” Combe said.
Investors were weighing up the latest print on the Chinese economy Wednesday. China expanded a fraction faster than expected in the April-to-June quarter, while other data released Wednesday suggested domestic conditions remain relatively upbeat. Read more about China’s GDP.
“There’s a little bit of cooling in China, but no cause at this stage to think there is any sort of demand that is going come off. [Gross domestic product] numbers are still pretty respectable,” Combe said.
The dollar index DXY -0.19% , which compares the U.S. unit’s performance against a basket of six other major currencies, slipped to 75.861 from 76.028 late Tuesday.
A weaker greenback encourages investment in dollar-priced commodities including metals.
The broader metals complex traded higher during Asian trading hours Wednesday.
September copper HG1U +0.91% added 4 cents, or 1.0%, to $4.43 a pound.
Platinum for October delivery PL1V +0.52% rose $9.10, or 0.5%, to $1,745.40 an ounce, while the September contract for palladium PA1U +0.52% platinum’s sister metal, gained $3.60, or 0.5%, to $771.05 an ounce.
Virginia Harrison is a MarketWatch reporter based in Sydney.
