Gold gained for a second day in New York as equities rebounded, signaling investors won’t have to sell the metal to cover losses in other markets.
European stocks and the S&P 500-stock futures index climbed and the euro rebounded against the dollar. Gold had declined in London trading earlier today as investors were forced to sell the metal to cover losses in other markets, said Robin Bhar, an analyst at Credit Agricole SA in London.
“Beyond the next few hours, days or weeks, you would still want to be diversified into gold,” Bhar said by phone today. “It should be $100 higher because of all the stresses.”
Gold for delivery in December jumped 1.6 percent to $1,756.90 an ounce at 8:13 a.m. on the Comex in New York. Prices rose 1 percent yesterday.
Silver for December delivery advanced 1.8 percent to $34.565 an ounce, platinum for January delivery gained 2.3 percent to $1,637.50 an ounce and palladium for December delivery was 3.3 percent higher at $670 an ounce.
The MSCI All-Country World Index of shares has dropped 4.7 percent this week on speculation Greece may default on its bonds. Greek bond yields climbed above 100 percent for the first time today.
“With the need for dollars, the need for liquidity, positions in gold are being liquidated,” Bhar said earlier today. “This need for cash is probably a very negative factor for gold in the very short term.”
Gold futures have jumped 23 percent this year as investors bought the metal as an alternative to stocks, bonds and currencies.
The metal will average $1,600 an ounce this year, $1,805 in the fourth quarter and may climb to $2,000 by the end of the year, Bhar said.
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