BLBG:Gold Rebounds From One-Month Low as Fund Holdings Gain to Record on Demand
Gold rallied from a one-month low as investors sought to protect their wealth against financial market turmoil driven by concern that debt levels in the U.S. and Europe will weigh on global economic growth.
Bullion for immediate delivery rose as much as 0.7 percent to $1,688.25 an ounce and traded at $1,685.65 at 3:04 p.m. in Singapore. The metal fell to $1,667.03 yesterday, the lowest level since Oct. 25. December-delivery futures gained 0.5 percent to $1,686.30 on the Comex in New York.
Holdings in exchange-traded products climbed to a record 2,341.939 metric tons yesterday, data compiled by Bloomberg show. Asian stocks declined for a sixth day today after a U.S. congressional committee’s failure to agree on deficit cuts set the stage for $1.2 trillion in automatic spending cuts.
“We expect inflows into both gold bars and coins and ETFs to continue as Europe and the U.S. are still not free from the sovereign-debt issues,” Samsung Securities Co. analysts led by Simon Francis wrote in a note today. “The global economic growth outlook continues to deteriorate and U.S. interest rates should remain low for longer.”
Gold, which reached a record $1,921.15 on Sept. 6, is set for an 11th annual gain as investors shun declining equities and some currencies. The metal is 1.7 percent lower this month as the dollar rallied 2.3 percent against a six-currency basket.
“We are holding a fair amount of cash,” Jack Ablin, chief investment officer at Harris Private Bank, said in a Bloomberg Television interview. “My sense on gold is it’s just run really far. It needs to retrench a little bit.”
Cash silver fell 0.4 percent to $31.4625 an ounce after dropping to a one-month low of $30.6875 yesterday. Spot platinum gained 0.4 percent to $1,554.50 an ounce after touching $1,537.75 yesterday, the lowest level since Oct. 25. Palladium lost 0.6 percent to $587.50 an ounce after declining to a one- month low of $583.50 yesterday.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
