SF: Gold Advances as Investors Seek Haven From European Debt
May 6 (Bloomberg) -- Gold futures rose for the fourth time in five sessions as some investors sought a haven from financial turmoil in Europe. Other precious metals were also higher.
The euro traded at a 14-month low against the dollar after Greece's finance minister said the nation doesn't have enough money to pay its debt due this month. Three people were killed in Athens yesterday in protests against proposed austerity measures. Investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, rose to a record.
"If Greece fails to comply with the measures, any aid from the EU and IMF will simply prolong the eventual day of reckoning," said Tom Pawlicki, an analyst at MF Global Holdings Ltd. in Chicago. "Gold could benefit from safe-haven inflows despite dollar strength."
Gold futures for June delivery rose $9.10, or 0.8 percent, to $1,184.10 an ounce at 9:58 a.m. on the Comex. Gold denominated in euros, British pounds and Swiss francs rallied to all-time highs.
Assets held by the SPDR Gold Trust rose 7 metric tons to 1,166 tons yesterday, the largest increase since April 8, according to the company's Web site.
Gold may head for a record level in dollars as concern that the Greek crisis might widen boosts demand for the metal, Morgan Stanley analysts led by New York-based Hussein Allidina said. Futures reached an all-time high of $1,227.50 on Dec. 3.
Investors in Greece and elsewhere in Europe are buying bullion coins, raising premiums by as much as 6 percent in the past two weeks, Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland, said today in an e-mail.
Spot prices will average $1,300 an ounce in the fourth quarter, according to Standard Chartered Plc. That compares with an average of $1,122.47 this year, according to data compiled by Bloomberg.
Still, prices may be too high to attract new buyers, Stephen Platt, an analyst at Archer Financial Services Inc. in Chicago, said.
"Longer-term investors are not moving into gold at these prices," said Platt. "The panic and bad news have already been discounted. You need some fresh news to bolster this market."
Silver for July delivery increased 7.1 cents, or 0.4 percent, to $17.605 an ounce on the Comex. Platinum for July delivery rose $18.10, or 1.1 percent, to $1667.70 an ounce on the New York Mercantile Exchange, while palladium for June delivery was up $3.60, or 0.7 percent, to $512.15 an ounce.
