BLBG: Gold Heads for Longest Weekly Rally Since March on Demand
Gold traded near the highest in almost four months, heading for the longest run of weekly gains since March, as concerns about Europe’s economy and the Middle East boosted haven demand. Palladium was near a 13-year high.
Gold rallied as much as 1.3 percent yesterday after a company linked to Portugal’s second-largest bank missed debt payments, re-igniting concern about Europe’s sovereign-debt crisis. Banco Espirito Santo SA said today it has exposure of 1.18 billion euros ($1.6 billion) to companies of Grupo Espirito Santo. Israel called up 33,000 reserve soldiers, intensifying its response to Hamas rocket attacks from Gaza.
“Gold prices have opened pretty much flat,” Edward Meir, an analyst at INTL FCStone Inc. in New York, said in a note. Should bullion rise today, “this is going to attract even further technical interest, although we ourselves are not that inclined to jump in given that we do not think the Portuguese banking story will have much staying power and is significant enough to deliver a destabilizing jolt.”
Bullion for immediate delivery was little changed at $1,335.59 an ounce by 9:25 a.m. in London after rising as much as 0.2 percent to $1,338.99 an ounce, according to Bloomberg generic pricing. The metal rallied to $1,345.17 yesterday, the highest price since March 19, and is heading for a sixth weekly climb. Gold for August delivery traded at $1,336.40 an ounce on the Comex in New York on volumes that were 33 percent below the 100-day average for this time of the day, data compiled by Bloomberg show.
“Gold moved higher, attracting safe-haven buying as financial market concerns re-emerged,” James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note. “There is also a geopolitical dimension.”
Interest Rates
Gold gained 11 percent this year amid expectations that U.S. interest rates will remain low and as geopolitical tensions in the Middle East and Ukraine increased. Minutes of the U.S. Federal Reserve’s last meeting showed some officials were concerned investors may be complacent about the economic outlook. Israeli leaders want to stop a wave of rocket attacks on Israel from the Gaza Strip.
Bullion’s advance lifted its 14-day relative-strength index above the level of 70 yesterday for the first time in a week, suggesting to some investors who study charts that prices may reverse. The gauge was at 71.4 today.
Traders expect safe-haven appeal amid geopolitical tensions to lift gold prices next week, according to a Bloomberg survey.
Palladium for immediate delivery fell 0.3 percent to $868.13 an ounce, set for a fourth weekly increase. The metal rose to as much as $877.29 yesterday, the highest since February 2001, then erased gains to break a 13-day winning run.
Spot platinum fell 0.3 percent to $1,508.35 an ounce after prices rose yesterday to as much as $1,519.68, the highest level since Sept. 4. The metal is still poised for a fourth weekly gain that’s the longest stretch since March.
Silver was little changed at $21.3999 an ounce after climbing to $21.582 yesterday, the highest price since March 17. The metal is heading for a sixth weekly advance, the longest such run since April 2011.
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 editors responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net John Deane, Sharon Lindores
