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Gold Rebounds From Eight-Week Low on Demand for Haven After Euro Declines
Gold futures rebounded from the lowest price in eight weeks on demand for a haven from weakening currencies.
The euro fell as much as 0.8 percent on renewed debt concerns in Europe. Gold surged to a record $1,266.50 on June 21 and also reached all-time highs last month in euros, U.K. pounds and Swiss francs. Earlier today, the metal touched $1,175.10 an ounce, the lowest level since May 21.
“It’s a good time to buy gold while it’s on sale,” said Matt Zeman, a trader at LaSalle Futures Group in Chicago. “For buy-and-hold types of people, fiscal irresponsibility is too widespread to completely trust fiat currencies.”
Gold futures for August delivery rose $9.80, or 0.8 percent, to $1,191.70 on the Comex in New York, the biggest gain for a most-active contract since July 13. The metal has gained 8.7 percent this year.
European regulators are examining 91 banks to determine whether they can survive potential losses on sovereign-debt holdings. Results will be released July 23.
“Investors are nibbling at the long side of gold,” said Adam Klopfenstein, a senior market strategist at Lind-Waldock, a broker in Chicago. “There’s a small degree of uncertainty heading into the bank-stress test.”
Jewelry Sales Increase
Sales at the House of Kahn Estate Jewelers in Chicago were up 30 percent in June from a year earlier as customers viewed gold and precious stones as more likely to retain value, Tobina Kahn, a vice president, said in an interview last month.
Kathleen Markiewicz, a customer at the store, said that she has been buying one piece of jewelry a month and selling investments in mutual funds.
“To me, it is a safer investment,” Markiewicz said.
Moody’s Investors Service cut Ireland’s credit rating one level to Aa2 yesterday, citing a “significant loss of financial strength” and the cost of bank bailouts.
Russia’s central bank added 200,000 ounces of gold to its reserves last month, increasing the stockpile to 22.8 million ounces (709.2 metric tons), the bank said today in an e-mailed statement.
Silver futures for September delivery rose 15 cents, or 0.9 percent, to $17.693 an ounce on the Comex.
Platinum futures for October delivery rose $4.70, or 0.3 percent, to $1,517.80 an ounce on the New York Mercantile Exchange.
Palladium futures for September delivery climbed $7.15, or 1.6 percent, to $451.05 an ounce.
----With assistance by Millie Munshi in New York, Nicholas Larkin in London and Paul Abelsky in Moscow. Editors: Michael Arndt, Daniel Enoch.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
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