Gold Jumps Most in a Week as European Debt Concerns Boost Demand for Haven
Gold rose the most in a week on renewed concern that Europe’s debt crisis will threaten economies, boosting demand for a haven.
European finance ministers ruled out efforts to prop up the faltering economy and gave no indication of providing aid for lenders at a meeting today. Gold has jumped 28 percent this year, reaching a record $1,923.70 an ounce on Sept. 6, on mounting signs the global economy will slow.
“People realize that the background problems have not disappeared, and the crisis in Europe has not been resolved,” William O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview.
Gold futures for December delivery rose $33.30, or 1.9 percent, to settle at $1,814.70 on the Comex at 1:49 p.m. in New York, the biggest gain since Sept. 8.
Still, prices declined 2.4 percent this week. Yesterday, the European Central Bank said it will coordinate with other central banks to ensure euro-area lenders have enough dollars.
“They’re only really geared to put out spot fires and play brinkmanship, rather than to deliver a killer package that will actually resolve all their issues,” Tom Price, an analyst at UBS AG, said by telephone from Sydney. “In that environment, the problem drags on for years, not months, and it’s a great environment for gold.”
Eighteen months of crisis-fighting and 256 billion euros ($352 billion) in aid for Greece, Ireland and Portugal have failed to stabilize markets as the turmoil spread to Italy and Spain.
“They are moving to facilitate an orderly default for Greece, and then rallying around the remaining countries and banking system,” James Dailey, who manages $215 million at TEAM Financial Management LLC in Harrisburg, Pennsylvania, said in a telephone interview. “They can’t fix a problem that has no answer, but they can get rid of some of the degree of uncertainty by acting.”
Silver futures for December delivery rose $1.33, or 3.4 percent, to settle at $40.831 an ounce on the Comex. The metal retreated 1.9 percent this week, a second straight loss.
On the New York Mercantile Exchange, platinum futures for October delivery climbed $33.30, or 1.9 percent, to $1,813.90 an ounce, the biggest jump since Aug. 9. Palladium futures for December delivery rose $9.45, or 1.3 percent, to $732.95 an ounce.
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