Gold Advances as Buyers Take Advantage of Price Decline
Gold gained for a second straight day in New York as investors seeking to diversify their assets increased physical holdings of the metal.
Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded fund, rose yesterday for a second day to 1,270.26 metric tons, according to the company’s website. Demand in Asia outside of India was “good” yesterday and interest in Europe is “evident,” UBS AG said in a report. Before today, bullion declined 6.3 percent this month.
“There are a lot of gold bulls remaining out there, and they’re coming in and buying against the lows we’ve seen,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “We’re near the bottom of the recent trading range, and the price may be attractive.”
Gold futures for August delivery rose 0.7 percent to settle at $1,571.20 an ounce at 1:38 p.m. on the Comex in New York. The contract still fell 1.4 percent this week as concern that Europe’s debt crisis will escalate lifted the dollar, cutting demand for alternative investments.
“Gold has been hurt by the strength in the U.S. dollar as investors turn their focus once again to Europe,” said Feng Liang, an analyst at GF Futures Co., a unit of China’s second- largest listed brokerage.
The dollar has advanced 1.3 percent this week against a basket of six currencies that includes the euro.
CME Group Inc. cut the amount that speculators must keep on deposit for an initial account in gold futures on the Comex to $9,113 per contract from $10,125, it said in a statement yesterday. The maintenance margin will drop to $6,750 from $7,500. The changes are effective after the close of business on May 29.
Silver futures for July delivery climbed 0.8 percent to $28.386 an ounce on the Comex, a second straight advance.
On the New York Mercantile Exchange, platinum futures for July delivery advanced 0.3 percent to $1,426.50 an ounce, also a second straight increase. Palladium futures for June delivery rose 0.4 percent to $590 an ounce, the first gain in three days.
To contact the editor responsible for this story: Steve Stroth at firstname.lastname@example.org
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.