BLBG:Gold Gains With Commodities in London as ETP Holdings Set Record
Gold gained in London, heading for the longest winning streak since August, on signs of increased investor demand.
Holdings in exchange-traded products backed by bullion yesterday rose 0.2 percent, the most since Oct. 8, to a record 2,591.99 metric tons, data compiled by Bloomberg show. Commodities also climbed. Greek Prime Minister Antonis Samaras got enough support to approve austerity measures needed to unlock bailout funds.
“Expect the metal to be dominated by wider risk sentiment,” Edel Tully, a London-based analyst at UBS AG, said in a report today. “With the current macro climate being supportive of gold, we expect ETF buyers to emerge in greater size.” All ETFs, or exchange-traded funds, are exchange-traded products.
Gold gained 0.1 percent to $1,720.10 an ounce at 9:25 a.m. in London, the fourth consecutive gain and the longest rally since Aug. 23. The futures for December delivery rose 0.4 percent to $1,720.70 an ounce on the Comex in New York.
Prices in London have advanced 9.9 percent this year as central banks including the Federal Reserve took steps to shield their economies hurt by Europe’s crisis.
“Gold continues to trade as a risk asset rather than a risk hedge, suggesting that the focus for the time being on the ’fiscal cliff’ negotiations should support the dollar and limit further upside moves in the short term,” Citigroup Inc. said in a report e-mailed today.
President Barack Obama elected for a second term faces the task of reaching a compromise with Congress on lowering the deficit before more than $600 billion in tax increases and spending cuts start in January.
The ECB President Mario Draghi said Europe’s debt crisis is affecting Germany. China’s Communist Party gathers today in Beijing to choose new leaders in the world’s second-largest economy.
Silver for immediate delivery fell 0.1 percent to $31.7813 an ounce. Platinum was down less than 0.1 percent at $1,542.75 an ounce and palladium dropped 0.4 percent to $610 an ounce.
To contact the reporter on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
