Gold Rises to Six-Week High on Mounting European Sovereign-Debt Concerns
Gold futures rose to a six-week high as Europe’s escalating sovereign-debt crisis spurred demand for a haven.
Italian Prime Minister Silvio Berlusconi’s allies pressured him to step aside after contagion from the region’s fiscal woes pushed the nation’s borrowing costs to euro-era records. Gold jumped to a record $1,923.70 an ounce on Sept. 6 on demand for an alternative to equities and some currencies.
“The problems in Europe are not disappearing in a hurry, and there is so much confusion,” Thorsten Proettel of Landesbank Baden-Wuerttemberg in Stuttgart, Germany, said in a telephone interview. “There is a basis for gold to continue to rise.”
Gold futures for December delivery gained 2 percent to close at $1,791.10 at 2:27 p.m. on the Comex in New York. After the settlement, the metal reached $1,796, the highest for a most-active contract since Sept. 21. The commodity has jumped 26 percent this year.
Berlusconi struggled to keep his allies in line after some lawmakers announced defections before critical parliamentary votes in coming days.
“Gold is responding to the general market mood that the European crisis will develop much worse before it gets better,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. “At the moment, we do not have a foreseeable lasting solution and high uncertainty remains.”
Silver futures for December delivery gained 2.2 percent to $34.828 an ounce on the Comex. The metal has climbed 13 percent this year.
On the New York Mercantile Exchange, platinum futures for January delivery rose 1.8 percent to $1,658 an ounce. Palladium futures for December delivery advanced 1 percent to $661.90 an ounce.
To contact the editor responsible for this story: Steve Stroth at firstname.lastname@example.org