Gold Fluctuates on European Debt Concern, Increased Tension Between Koreas
Gold fluctuated in New York as concerns about Europe’s debt crisis and escalating tensions between North and South Korea boosted demand for a protection of wealth.
Ireland had its long-term sovereign rating cut two steps to A from AA- by Standard & Poor’s, which cited concern about borrowing by the government as the nation seeks aid from the International Monetary Fund and European Union. The United Nations called for talks with North Korea over its shelling of a South Korean island. German business confidence unexpectedly rose to a record high in November.
“Support may continue to be offered by concerns over North and South Korea, worries over European sovereign debt,” Tom Pawlicki, an analyst at MF Global Holdings Ltd. in Chicago, said in a report. “Pressure will come from stronger economic data.”
Gold futures for February delivery lost $1.90, or 0.1 percent, to $1,377.80 an ounce at 7:57 a.m. on the Comex in New York. Prices swung between a gain of 0.2 percent and a loss of 0.5 percent. The metal for immediate delivery in London was little changed at $1,376.20.
Bullion was little changed at $1,376.25 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,377.50 at yesterday’s afternoon fixing.
North Korea yesterday fired artillery shells at the South Korean island of Yeonpyeong near the disputed border between the two countries, killing two soldiers and two civilians and setting houses ablaze.
The UN Command proposed to North Korea’s military talks between senior officers over the shelling, adding in an e-mailed statement that it will investigate the incident. UN Commander Walter Sharp, who is also chief commander of the U.S. forces in South Korea, condemned North Korea’s attack as “threatening to the peace and stability of the entire region.”
Ireland’s Finance Minister Brian Lenihan will today lay out a four-year deficit-cutting program as the government races to finish talks on aid with the IMF and the European Union. Irish bonds fell today, and Spanish and Greek debt also declined.
“The growing realization that the risk of contagion is real and not going away anytime soon is leading to sustained safe-haven demand,” analysts at brokerage GoldCore Ltd. in Dublin said today in a report.
Still, the Munich-based Ifo institute said its business climate index rose to 109.3, the highest level since records for a reunified Germany began in 1991. Economists predicted a drop to 107.5. Government reports due today may show consumer spending and orders for durable goods in the U.S. rose last month, according to economists’ forecasts.
Gold assets in exchange-traded products were little changed at 2,084.48 metric tons yesterday, according to data compiled by Bloomberg from 10 providers. Holdings reached a record 2,104.65 tons on Oct. 14. Silver holdings gained 51.7 tons to 14,930.3 tons, the highest amount since at least February, data from four providers show.
Silver for March delivery in New York lost 0.6 percent to $27.475 an ounce. It reached a 30-year high of $29.34 on Nov. 9 and is up 63 percent this year. Platinum for January delivery was 0.5 percent higher at $1,666.10 an ounce.
Palladium for March delivery added 0.1 percent to $693.20 an ounce. The metal will be in an increasing shortage in the coming years and prices may climb to $1,000 by 2014, Royal Bank of Scotland Group Plc said today in a report. The shortage may come from higher autocatalyst demand and in part from falling Russian state stockpiles of the metal, the bank said.
To contact the reporter on this story: Nicholas Larkin in London at firstname.lastname@example.org
To contact the editor responsible for this story: Claudia Carpenter at email@example.com
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.