BS: Gold May Gain in London as Slower Growth Concern Boosts Demand
By Nicholas Larkin and Sungwoo Park
June 15 (Bloomberg) -- Gold may gain in London as concern that the global economic recovery may slow boosts demand for the precious metal as a means of protecting wealth.
The euro slipped as much as 0.4 percent against the dollar before a German report forecast to show investor confidence in Europe’s largest economy declined. European equities fell after Moody’s Investors Service yesterday cut Greece’s credit rating. Bullion is trading within 2.4 percent of a record set last week.
Gold may be “supported by a lower euro and the Greece downgrade,” said Bayram Dincer, a commodity analyst at LGT Capital Management in Pfaeffikon, Switzerland. “Gold is viewed more as a universal currency with its safe-haven, last-resort properties.”
Gold for immediate delivery added $1.10, or 0.1 percent, to $1,222.35 an ounce at 9:04 a.m. local time. Bullion for August delivery was 0.1 percent lower at $1,223.70 on the Comex in New York.
Bullion has jumped 11 percent this year, climbing to a record $1,252.11 an ounce on June 8, and is headed for a 10th straight annual advance, the longest run of gains since at least 1920. The metal has climbed amid speculation that debt-cutting measures by European nations will slow growth.
Moody’s yesterday cut Greece’s credit rating to junk, citing “substantial” risks to the nation’s economic growth from the austerity measures tied to a 110 billion-euro ($134 billion) aid package from the European Union and the International Monetary Fund.
Greece Downgrade
“The Greece downgrade is fueling demand for gold,” said C.H. Oh, head of overseas futures at NH Investment & Futures in Seoul. “Too much money is being printed and so there are not many assets you can put your money into. That’s why investors go for scarce assets and I’m bullish on gold in the long term.”
Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were unchanged for a second day at a record 1,306.14 metric tons yesterday, according to figures on the company’s website. Global holdings added 3.24 tons to an all-time high 2,039.92 tons yesterday, according to Bloomberg data tracking 10 providers.
Silver for immediate delivery in London increased 0.6 percent to $18.3325 an ounce. Platinum lost 0.3 percent to $1,555.50 an ounce and palladium added 0.2 percent to $458.75 an ounce.
--Editors: John Deane, Dan Weeks.
To contact the reporters on this story: Sungwoo Park in Seoul at spark47@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net.
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.
