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Gold Tops $1,250 on Demand for Haven After Dollar, Global Equities Decline
Gold futures topped $1,250 an ounce, capping the biggest monthly gain since April, on speculation the dollar will decline, boosting the allure of the precious metal as a haven.
The dollar fell as much as 0.3 percent against a basket of six major currencies, including the yen and the euro, as Treasuries headed for a monthly gain. Gold reached $1,251.80, the highest level since June 28. The MSCI World Index of equities is down 4.2 percent in August on concern that the economic rebound is slowing.
“There’s a lot of skepticism about the U.S. being a safe haven going forward,” said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago. “If people aren’t comfortable in Treasuries, they’re going to shift into gold.”
Gold futures for December delivery rose $11.10, or 0.9 percent, to settle at $1,250.30 at 1:35 p.m. on the Comex in New York. The metal climbed 5.6 percent in August and is up 14 percent this year. The price reached a record $1,266.50 on June 21.
Treasury 10-year notes rose as yields headed for the biggest decline since the end of 2008, when the Federal Reserve slashed the benchmark interest rate to zero percent to 0.25 percent to revive the economy.
“Gold is the primary beneficiary of this general angst over the economy,” said Matthew Zeman, a metal trader at LaSalle Futures Group in Chicago. “The flight-to-safety bid is back on, and Treasury yields are a joke now. That’s a good setup for gold to go higher.”
Silver futures for December delivery rose 35.8 cents, or 1.9 percent, to $19.432 an ounce. This month, the metal gained 7.9 percent, the most since November.
Platinum futures for October delivery dropped $9.60, or 0.6 percent, to $1,523.50 an ounce on the New York Mercantile Exchange. The price fell 3.4 percent in August.
Palladium futures for December delivery rose $1.75, or 0.3 percent, to $501.85 an ounce. This month, the metal gained 0.4 percent.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
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