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Gold Climbs to Six-Week High on Signs of Faltering World Economic Rebound
Gold prices rose to a six-week high on signs the global economy is faltering, boosting demand for the metal as a protector of wealth.
Japan’s economy grew at less than a fifth of the pace economists estimated last quarter, pushing it into third place behind the U.S. and China. Manufacturing in the New York region expanded less than forecast in August, a report showed today. Gold prices have gained for two straight weeks on demand for the metal as a haven.
“There’s a flight to safety going on,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. “There’s a world of uncertainty about the economy and people feel we might be slowing down.”
Gold futures for December delivery gained $9.60, or 0.8 percent, to close at $1,226.20 an ounce as of 1:47 p.m. on the Comex in New York. Earlier, the price touched $1,229.50, the highest level since July 1.
Prices also gained as the dollar fell for the first time in six sessions against the euro, Lesh said. Gold futures usually move inversely to the U.S. currency.
Gold has gained 12 percent this year, reaching a record $1,266.50 on June 21.
“A sharp rise in gold prices should be curbed by the price-sensitive demand for jewelry,” Commerzbank AG analysts including Eugen Weinberg said today in a report. “After stronger physical gold-buying was evident at prices below $1,200 an ounce, selling can now be observed again at the current higher price level, especially in Asia.”
Speculative net-long positions, or bets prices will rise, gained 2.8 percent on the Comex in the week ended Aug. 10, according to U.S. Commodity Futures Trading Commission data. The holdings on July 20 were at the lowest level since late March.
“The recent stabilization in the net-long speculative position may signal room for new longs to be added,” Walter de Wet, an analyst at Standard Bank Plc in London, said today in a report.
Silver futures for September delivery gained 31.8 cents, or 1.8 percent, to $18.483 an ounce.
Platinum futures for October delivery added $11.10, or 0.7 percent, to $1,537.30 an ounce of the New York Mercantile Exchange. Palladium futures for September delivery gained $8.50, or 1.8 percent, to $485.75 an ounce.
To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Millie Munshi in New York at mmunshi@bloomberg.net.
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