BS: Gold May Gain in New York as Weaker Dollar Spurs Investor Demand
By Nicholas Larkin and Glenys Sim
Feb. 28 (Bloomberg) -- Gold may gain for the first time in three days in New York as a weaker dollar spurs demand for the metal as an alternative investment. Silver reached a five-month high.
The dollar fell versus the euro before the European Central Bank allots a second round of unlimited three-year funds to help the region’s banks tomorrow. Global equities traded near a six- month high earlier today after Germany’s parliament voted to approve a second aid package for Greece. Holdings in gold-backed exchange-traded products extended a climb to a record yesterday.
“The euro is stronger against the dollar and that’s one of the major supportive factors” for gold, Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said today by phone. Higher equities are “also supportive” for commodities including gold, he said.
Gold for April delivery gained 0.3 percent to $1,781.10 an ounce by 8:01 a.m. on the Comex in New York. Bullion for immediate delivery was up 0.7 percent at $1,779.96 in London.
Gold prices are up 14 percent this year after a 10 percent increase in 2011, an 11th consecutive annual gain. Holdings in bullion-backed ETPs rose 1.3 metric tons to 2,398.2 tons yesterday, data compiled by Bloomberg show.
After giving euro-region banks a record 489 billion euros ($657 billion) in its first refinancing operation on Dec. 21, the Frankfurt-based ECB will probably lend them another 470 billion euros this week, according a Bloomberg News survey.
Higher Prices
“I like the $1,700 to $2,000 range based on the macroeconomic factors as they exist today,” Chuck Jeannes, chief executive officer at producer Goldcorp Inc., said in an interview yesterday. “It’s certainly set the table for a much higher gold price.”
Silver for May delivery rose 1.2 percent to $36.035 an ounce after reaching $36.075, the highest price since Sept. 23. It’s the best-performing precious metal this year, up 29 percent. An ounce of gold bought as little as 49.48 ounces of silver in London today, the least since Oct. 31.
Palladium for June delivery was up 1 percent at $714.45 an ounce. Platinum for April delivery was little changed at $1,714 an ounce.
Impala Platinum Holdings Ltd. said about 9,000 dismissed employees returned to work at its Rustenburg mine in South Africa by yesterday and 11,600 who never went on strike. The company fired 17,200 workers after an illegal strike that halted output for about a month.
“Platinum may continue to enjoy some South African supply- risk premium as operations have yet to resume,” Edel Tully, an analyst at UBS AG in London, wrote in a report today. “We doubt that the potential for a supply shock out of South Africa is enough to justify a significantly higher platinum price.”
--With assistance from Adam Johnson in New York. Editors: Sharon Lindores, Dan Weeks
To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: John Deane at jdeane3@bloomberg.net
