BLBG:Gold Advances a Second Day as Dollar Drops Before Summit
Gold gained for a second day in New York before European Union leaders hold a summit this week amid speculation Spain will move toward seeking financial assistance.
Germany is open to Spain seeking a precautionary credit line from Europe’s rescue fund, two senior German coalition lawmakers said, prompting speculation that the Iberian nation may take the aid and help contain the euro-zone’s debt crisis. The euro rose to a one-month high against the dollar before trading up 0.5 percent. The U.S. Dollar Index, a gauge against six counterparts, fell for a second day, dropping 0.5 percent.
“Gold and the precious complex have been held afloat overnight and this morning by a stronger euro,” Edel Tully, an analyst at UBS AG in London, wrote today in a report. “Gold’s ability to stay buoyed today will be dependent on foreign exchange moves and risk appetite.”
Gold for December delivery climbed 0.3 percent to $1,751.90 an ounce by 7:23 a.m. on the Comex in New York. Bullion added 0.5 percent yesterday. The metal for immediate delivery was 0.2 percent higher at $1,750.65 an ounce in London.
EU leaders are set to gather in Brussels for two days starting tomorrow. Gold, up 12 percent this year, is on course for a 12th annual gain as central banks from Europe to the U.S. boost stimulus to try to strengthen their economies.
“If Spain’s financial troubles can be kept in check, it helps stabilize market sentiment,” said Xiang Nan, an analyst at CITICS Futures Co., a unit of China’s biggest listed brokerage.
Holdings in exchange-traded products were little changed at 2,577.25 metric tons yesterday after climbing to a record 2,582.98 tons on Oct. 11, data compiled by Bloomberg show.
Silver Gains
HSBC Holdings Plc lowered its 2012 average gold price forecast to $1,700 an ounce from $1,760, citing price weakness earlier this year. Still, bullion is expected to rise to $1,900 by the end of the year, James Steel, an analyst at the bank, said in a report dated today. The 2013 gold price forecast was raised to $1,850 an ounce from $1,775.
Silver for December delivery gained 0.4 percent to $33.09 an ounce. Platinum for January delivery rose 0.9 percent to $1,660.10 an ounce. Palladium for December delivery added 0.8 percent to $644.35 an ounce.
To contact the reporters on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
