Gold Extends Rally to Record as Fed to Maintain Low Rates Through Mid-2013
Gold Tops $1,750 for First Time as Equity Rout Stokes Demand
Carla Gottgens/Bloomberg
Goldman Sachs Group Inc. raised its forecasts for gold futures yesterday to $1,730 in six months and $1,860 in a year based on expectations for real U.S. interest rates to stay lower for longer.
Goldman Sachs Group Inc. raised its forecasts for gold futures yesterday to $1,730 in six months and $1,860 in a year based on expectations for real U.S. interest rates to stay lower for longer. Photographer: Carla Gottgens/Bloomberg
Aug. 9 (Bloomberg) -- George Milling-Stanley, managing director for government affairs at the World Gold Council, talks about the drivers for gold prices and China's gold reserves. Milling-Stanley speaks with Erik Schatzker, Sara Eisen and Betty Liu on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
Aug. 9 (Bloomberg) -- Jason Pride, director of investment strategy at Glenmede, talks about the performance of U.S. stocks, gold prices and his investment strategy. Pride also discusses Federal Reserve monetary policy. He speaks with Carol Massar, Matt Miller and Suzanne O'Halloran on Bloomberg Television's "Street Smart." (Source: Bloomberg)
Aug. 8 (Bloomberg) -- Manfred Huebner, managing director of Sentix Behavioral Indices, discusses investor sentiment and the outlook for gold prices. He speaks from Frankfurt with Bloomberg's Manus Cranny. (Source: Bloomberg)
Aug. 8 (Bloomberg) -- Harry Skaliotis, head of client portfolio management at Man Group Plc's AHL Diversified Fund, talks about his investment strategy. He speaks with Maryam Nemazee on Bloomberg Television's "The Pulse." (Source: Bloomberg)
Aug. 8 (Bloomberg) -- Puru Saxena, chief executive officer of Puru Saxena Wealth Management, talks about the outlook for gold prices and the state of the global economy. Saxena speaks from Hong Kong with Mark Barton on Bloomberg Television's "Countdown." (Source: Bloomberg)
Gold Tops $1,750 for First Time as Equity Rout Stokes Demand
Jerome Favre/Bloomberg
A Chow Sang Sang Holdings International Ltd. employee arranges gold necklaces in a store in Hong Kong.
A Chow Sang Sang Holdings International Ltd. employee arranges gold necklaces in a store in Hong Kong. Photographer: Jerome Favre/Bloomberg
Gold futures advanced, extending a rally to a record for the second straight day, as the Federal Reserve pledged to keep its benchmark interest rate low at least through mid-2013.
Gold retreated from the settlement after equities rallied as investors studied today’s Fed policy statement. The metal has jumped 45 percent in the past year following bond buybacks by the central bank during two rounds of so-called qualitative easing, combined with the lowest borrowing costs ever.
“The anxiety premium for gold remains,” Adam Klopfenstein, a senior strategist at MF Global Holdings Ltd. in Chicago, said in a telephone interview. “People are disappointed that there was no mention of QE3, but the statement shows that the government is not willing to go too excessive to stimulate the economy.”
Gold futures for December delivery advanced $29.80, or 1.7 percent, to close at $1,743 an ounce at 1:49 p.m. on the Comex in New York. Earlier, the price reached a record $1,782.50. The metal topped $1,780 in electronic trading after the Fed statement and traded at $1,740.10 at 4:03 p.m.
Fed policy makers left the target interest rate in a range of zero percent to 0.25 percent. The Federal Open Market Committee discussed a range of policy tools to bolster the economy and said it is “prepared to employ these tools as appropriate.”
U.S. Debt
Yesterday, gold surged 3.7 percent, the most since March 2009, after Standard & Poor’s cut the U.S. credit rating by one level from the top AAA grade. The S&P announcement spurred a rout in global equities and stoked concern that the U.S. may lapse into another recession.
Silver futures for September delivery fell $1.497, or 3.8 percent, to close at $37.883 an ounce on the Comex.
Platinum futures for October delivery climbed $32.80, or 1.9 percent, to $1,756.40 an ounce on the New York Mercantile Exchange. For the first time since 2008, gold traded at a premium to the metal used mostly in catalytic converters in vehicles. This year, platinum has dropped 1.2 percent, while gold has surged 23 percent.
Palladium futures for September delivery advanced $6.05, or 0.8 percent, to $734.55 an ounce on the Nymex.
To contact the reporters on this story: Debarati Roy in New York at droy5@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.
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