Gold Climbs to Eight-Week High as Dollar Drop, Europe Debt Fueling Demand
Feb. 1 (Bloomberg) -- Patrick Legland, head of research at Societe Generale SA, discusses hte outlook for European equities, the U.S. housing market and the price of gold. He speaks with Owen Thomas on Bloomberg Television's "On the Move." (Source: Bloomberg)
Gold futures in New York climbed to the highest price in almost eight weeks as Europe’s lingering debt crisis and a weaker dollar spurred demand for the precious metal as an alternative asset.
The dollar fell as much as 0.8 percent against a basket of six currencies. Gold jumped 11 percent last month, the biggest January gain since 1983, on mounting concern that Europe’s debt woes may lead to a recession, and after the Federal Reserve pledged to keep its benchmark U.S. interest rate low until at least late 2014 to spur growth.
“Gold is trading like a hard currency,” James Dailey, who manages $215 million at TEAM Financial Management LLC in Harrisburg, Pennsylvania, said in an e-mail. “People are worried about currency debasement because of the credit easing by several countries.”
Gold futures for April delivery gained 0.5 percent to settle at $1,749.50 an ounce at 1:46 p.m. on the Comex in New York, the highest closing level since Dec. 2. Earlier, the price touched $1,754, the highest since Dec. 8. The metal has gained 31 percent in the past year.
Bullion may reach $2,000 by the fourth quarter, up from a first-quarter estimate of $1,850, analysts at Bank of America Merrill Lynch said today in an e-mailed report.
Gold climbed 10 percent in 2011, an 11th consecutive annual gain, reaching a record $1,923.70 in September, as investors sought to diversify from equities and some currencies.
Silver futures for March delivery rose 1.6 percent to $33.807 an ounce in New York. Yesterday, the price touched $34.13, the highest since Nov. 16.
On the New York Mercantile Exchange, platinum futures for April delivery advanced 2.2 percent to $1,623.20 an ounce. Palladium futures for March delivery rose 1.5 percent to $696.70 an ounce, rising for the first time in four sessions.
To contact the reporter for 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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