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Gold Climbs to Eight-Week High on Concern About Stalling Economic Growth
Gold advanced to the highest price in almost eight weeks in New York as concern that the economic recovery is stalling spurred demand.
Stocks in Europe and Asia fell and U.S. equities headed for the fifth straight decline. A government report today showed U.S. manufacturing is slowing. Gold has gained 13 percent this year, touching a record $1,266.50 an ounce in June.
“The fear is palpable,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois. “The economy is really faltering. People are worried about the stock market. Money has to go somewhere and it’s going to gold.”
Gold futures for December delivery rose $7.90, or 0.6 percent, to settle at $1,241.30 ounce at 1:39 p.m. on the Comex in New York. Prices earlier advanced to $1,243.40, the highest price since July 1.
Orders for U.S. durable goods increased 0.3 percent in July, the Commerce Department said today. Economists expected a gain of 3 percent, the median of 75 estimates in a Bloomberg News survey.
The yield on the U.S. Treasury 10-year note fell to the lowest level in 19 months.
“Gold can continue to compete with Treasuries for investment as opportunity costs of holding gold are low due to falling interest rates,” said Tom Pawlicki, an analyst at MF Global Ltd. in Chicago.
Investor Demand Gains
Gold demand expanded 36 percent to 1,050.3 metric tons in the second quarter from 769.6 tons a year earlier, as investors boosted purchases of bullion-backed funds, the World Gold Council said today. Purchases of gold in exchange-traded funds were 291.3 tons, the second-highest quarterly total on record, the producer-funded group said.
Silver futures for December delivery rose 64.4 cents, or 3.5 percent, to $19.072 an ounce on the Comex, the highest closing price since June 25.
Silver held in ETF Securities Ltd.’s European and Australian exchange-traded products rose 3.8 percent to a record 30.058 million ounces yesterday, according to the company’s website.
Platinum futures for October delivery rose $9.70, or 0.6 percent, to $1,527.40 an ounce on the New York Mercantile Exchange. Palladium futures for September delivery rose $7.30, or 1.5 percent, to $491.55 an ounce.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
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