BLBG: Gold May Gain as Oil, Equity Advance Raises Risk of Inflation
By Kim Kyoungwha
July 21 (Bloomberg) -- Gold, little changed in Asian trading, may climb as equity gains and an advance in crude oil boost demand for the metal as hedge against accelerating prices.
Oil climbed for a fifth day and the MSCI Asia Pacific Index of equities gained for a sixth day after data showed an index of leading economic indicators in the U.S. topped projections, indicating the country may be emerging from recession.
“An improving economic outlook is leading investors to the risk of inflation, which will become more pronounced over time, bolstering demand for gold,” said Hwang Il Doo, a commodities broker with KEB Futures Co. in Seoul. “Still, the metal may face some resistance above $950 in the short term.”
Gold for immediate delivery gained as much as 0.7 percent to $954.90 an ounce before trading at $947.80 at 9:27 a.m. in Singapore.
Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were unchanged for a second day at 1,094.54 metric tons yesterday, according to figures on the company’s Web site.
Bullion jumped to $954.99 yesterday, the highest since June 12, as the Dollar Index, a gauge of the dollar’s value against six major currencies, fell to the lowest since June 3.
Among other precious metals for immediate delivery, silver was little changed at $13.6450 an ounce, platinum added 0.3 percent to $1,187 an ounce and palladium gained 0.2 percent to $255 an ounce.
To contact the reporter on this story: Kyoungwha Kim in Singapore at gsim4@bloomberg.net
