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Gold Climbs Most in Three Weeks as Price Slump May Spark Jump in Demand
Gold rose the most in three weeks on speculation that the lowest prices since May will revive demand for the precious metal.
Gold futures settled below $1,200 an ounce on each of the past three days after rallying to a record $1,266.50 on June 21. Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, have dropped 0.3 percent from an all- time high on June 29.
“We’ve got some aggressive buyers coming in today,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. “People still want to be long gold. They’re all willing to buy gold on the dips, but they’re not willing to chase the highs.”
Gold futures for August delivery rose $13.70, or 1.1 percent, to $1,209.80 on the Comex in New York, the biggest gain since June 17. On July 7, the metal touched $1,185, the lowest level for the most-active contract since May 24.
The metal gained 0.2 percent this week and has climbed 10 percent this year.
“We believe gold-price strength has not been exhausted,” Deutsche Bank AG said in a report. “Gold prices can still not be considered extreme.”
Gold will average $1,275 in the third quarter and $1,400 in the fourth quarter, the bank said.
Euro Falls
The precious metal also gained as the euro fell against the dollar for the first time in four sessions. Gold reached all- time highs in euros, U.K. pounds and Swiss francs last month on demand for a haven from Europe’s fiscal woes.
“We’re seeing movement out of the euro into gold again,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago.
Traditionally, gold has moved in tandem with the euro as an alternative asset to the dollar.
Silver futures for September delivery rose 20.1 cents, or 1.1 percent, to $18.073 an ounce on the Comex, capping a 2 percent gain for the week.
Platinum futures for October delivery climbed $16.80, or 1.1 percent, to $1,533.20 an ounce on the New York Mercantile Exchange. Palladium futures for September delivery gained $12.55, or 2.8 percent, to $456.95 an ounce, also on the Nymex. Platinum rose 2 percent this week and palladium jumped 7 percent, the first weekly gain since June 18.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
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