BLBG: Gold, Little Changed in London, May Advance on Haven Demand
July 3 (Bloomberg) -- Gold, little changed in London today, may gain as rising unemployment in the U.S. increases concern the global recession will continue, boosting demand for the metal as an alternative investment.
A report yesterday showed U.S. employers cut more jobs than forecast in June and the jobless rate rose to the highest in almost 26 years. European and Asian equities declined today after the MCSI World Index of shares dropped the most in 10 days yesterday.
“The U.S. jobs numbers are bullish for the gold market,” Bernard Sin, the head of currency and metals trading at Swiss refiner MKS Finance SA, said by telephone from Geneva. “Indian buyers are starting to buy gold at current levels, which is also encouraging for the metal.”
Bullion for immediate delivery gained $2.83, or 0.3 percent, to $932.63 an ounce at 11:48 a.m. in London. August gold futures added 0.2 percent to $932.40 an ounce on the New York Mercantile Exchange’s Comex division. Most U.S. markets are closed today for the Independence Day holiday.
The metal rose to $932.50 in the morning “fixing” in London, used by some mining companies to sell production, from $929.50 at yesterday’s afternoon fixing. Spot prices are up 5.7 percent this year, heading for a ninth annual gain.
Still, bullion is heading for a fourth weekly decline in five. The metal has slipped 0.7 percent this week as the U.S. Dollar Index, a six-currency measure of the greenback’s value, has added 0.6 percent and crude-oil futures have slid 3.7 percent. Gold’s gains may have been capped today as the dollar index rose as much as 0.4 percent. Some investors use oil prices as an inflation guide.
‘Very High Fear’
“Gold has been pricing in a very high fear of inflation, and with the U.S. unemployment data, the market should move toward a view that there’ll be no inflation for the next few years,” said Jesper Dannesboe, a senior commodity strategist at Societe Generale SA in London. “Crude oil has gone down, and the dollar could go higher.”
Investment in the SPDR Gold Trust, the biggest ETF backed by bullion, was unchanged for a second day at 1,120.55 metric tons yesterday, the company’s Web site showed.
“For almost two weeks, gold hasn’t been able to break and hold below” $925 to $926 an ounce and “hasn’t also been able to break higher above $943-$947,” Pradeep Unni, a Richcomm Global Services analyst in Dubai, said in a note today. “Today is most likely to be dull with U.S. markets closed.”
Silver for immediate delivery in London gained 0.4 percent to $13.445 an ounce. Platinum slipped 0.2 percent to $1,184.75 an ounce, and palladium was 1.1 percent lower at $249.27 an ounce.
