BLBG:Gold May Advance for Third Day as European Debt Concern Fuels Haven Demand
Gold may climb for a third straight day toward a record on concern that Europe’s sovereign-debt crisis may escalate and hurt economic growth, triggering a slump in equities and fueling demand for a haven.
Immediate-delivery metal, which reached an all-time high of $1,814.95 an ounce on Aug. 11, traded little changed at $1,782.95 at 11:32 a.m. in Singapore. The December-delivery contract gained as much as 0.3 percent to $1,790.80 on the Comex in New York, after closing at a record settlement yesterday.
U.S. stocks snapped the biggest three-day rally since 2009 as German Chancellor Angela Merkel and French President Nicolas Sarkozy proposed a financial-transactions tax and rejected selling euro bonds amid signs the region’s debt crisis is worsening. European second-quarter gross domestic product rose 0.2 percent, the worst performance since the euro region emerged from a recession in late 2009. In Germany, growth almost stalled.
“It’s going to be a bullish market,” Tetsuya Yoshii, vice president for derivative products at Mizuho Corporate Bank Ltd., said from Tokyo. “After Greece there was Spain, France and always some new problem, and the U.S. debt problem hasn’t really been solved, so people are looking for a safe haven.”
Gold is 26 percent higher this year on concern that Europe’s fiscal crisis, which started in Greece, is spreading to other countries including Italy, Spain and France. That, coupled with Standard & Poor’s cut of the U.S.’s top AAA credit rating, increased speculation that global growth may falter.
If gold prices fall back, “physical buyers will come in at the lower levels, and that’s going to keep the market supported,” said Yoshii.
Cash platinum gained for a seventh day, climbing as much as 0.3 percent to $1,823.88 an ounce, heading for the longest rally since January. Spot silver and palladium were little changed at $39.9475 an ounce and $755.50 an ounce respectively.
To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
