Gold Rises in Spot Market on Haven Demand Amid U.S., Europe Economic Woes

Gold climbed from a five-week low on demand for a store of value amid economic concerns in the U.S. and Europe.

U.S. employment fell in June for the first time this year, signaling a sluggish job-market recovery. Europe risks falling back into recession as nations such as Germany and the U.K. cut budgets sooner than expected, said Pacific Investment Management Co., which runs the world’s largest bond fund.

“People are still considering gold as a safe haven,” said Bernard Sin, the head of currency and metal trading at bullion refiner MKS Finance SA in Geneva. “Europe is still not in a good shape, and the U.S. is still not in a good shape.”

Gold for immediate delivery rose $11.90, or 1 percent, to $1,210.55 an ounce at 3:24 p.m. New York time. Yesterday, the price touched $1,196.65, the lowest level since May 25. The metal headed for the second straight weekly decline.

The price climbed to a record last month as the euro slumped on sovereign-debt concerns. Gold has advanced 10 percent in 2010 following gains in the past nine years.

The metal is “a good hedge against further problems in the financial field and further potential inflationary trends that will be coming,” Barry James, who manages $2 billion as chief executive officer at James Investment Research Inc. in Xenia, Ohio, said yesterday.

In June, gold also surged to all-time high in euros, U.K. pound and Swiss francs.

Gold futures for August delivery rose $1, or 0.1 percent, to $1,207.70 on the Comex in New York. The metal touched $1,196 yesterday after the close of floor trading. The price dropped 3.9 percent this week.

Platinum Slides

Platinum and palladium, used in pollution-control devices in cars, slumped for the fifth straight day in tandem with industrial metals.

Platinum futures for October delivery fell $3.2, or 0.2 percent, to $1,503.60 an ounce on the New York Mercantile Exchange. The drop this week marked the longest slump since early December. The metal dropped 4.5 percent since June 25.

Palladium futures for September delivery declined $2.15, or 0.5 percent, at $426.90 an ounce. This week, the metal tumbled 11 percent.

Silver futures for September delivery dropped 7.1 cents, or 0.4 percent, to $17.719 an ounce on the Comex. This week, the commodity tumbled 7.5 percent, the most since mid-May.

To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Yi Tian in New York at ytian8@bloomberg.net.

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