BLBG:Gold May Gain for Second Day as Optimism on Europe Rescue Fund Boosts Euro
Gold may advance for a second day as speculation that Slovakia will approve Europe’s enhanced bailout fund strengthened the euro, increasing the appeal of the metal priced in dollars.
Bullion for immediate delivery traded little changed at $1,676.80 an ounce at 1:05 p.m. in Singapore after climbing as much as 0.5 percent to $1,684.38. The price reached $1,692.18 yesterday, the highest level since Sept. 23, as the dollar dropped. The December-delivery contract dropped 0.2 percent to $1,678.50 an ounce on the Comex in New York.
“Gold gained, buoyed by a weaker dollar,” Natalie Robertson, an analyst at Australia & New Zealand Banking Group Ltd., wrote in a note today.
Slovakia, the only euro-area country that hasn’t backed an enhanced European Financial Stability Facility, will approve it today or tomorrow after the largest opposition party supported the motion. European Commission President Jose Barroso yesterday called for a plan to aid banks, the payout of a sixth loan to Greece and a faster start for a permanent rescue fund.
The euro traded at $1.3781 as of 11:35 a.m. in Tokyo from $1.3791 in New York yesterday, when it rose as high as $1.3834, the strongest since Sept. 16.
“Precious metals should maintain their upward directions in the near term,” said Tom Pawlicki, an analyst at MF Global Holdings Ltd. The market may be supported by “favorable CFTC data reported last Friday.”
Hedge funds and other money managers boosted net-long gold positions 4 percent to 133,156 contracts in the week to Oct. 4, data from the U.S. Commodity Futures Trading Commission showed. Long positions are bets on gains. Total open interest in Comex futures rose to 438,090 contracts on Oct. 11, after falling to a 2-year low of 432,816 contracts on Oct. 5.
Cash silver declined 0.5 percent to $32.4775 an ounce, spot platinum fell 0.4 percent to $1,545.55 an ounce and palladium shed 0.4 percent to $606.88 an ounce.
To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
