Breaking News

Argentina Dollar Bonds Due 2033 Drop for Second Day
Tweet TWEET

Gold Rises for Second Day as Equity Declines Spur Demand

Gold futures rose for a second straight day as a decline in equities boosted demand for alternative investments.

The Standard & Poor’s 500 Index of stocks fell as much as 0.9 percent as retailers from Staples Inc. to Urban Outfitters Inc. slumped on worse-than-estimated earnings. Gold has gained 7.7 percent this year as U.S. economic concerns and rising tension in Ukraine spurred haven demand.

“The weakness in the equity market is keeping gold supported,” Fain Shaffer, the president of Infinity Trading Corp. in Indianapolis, said in a telephone interview. “The market will likely remain range-bound” before more signals from the Federal Reserve on U.S. monetary stimulus, he said.

Gold futures for June delivery rose 0.1 percent to settle at $1,294.60 at 1:41 p.m. on the Comex in New York. The metal climbed less than 0.1 percent yesterday.

Earlier, prices fell as much as 0.6 percent after the World Gold Council said demand in China, the biggest global consumer, fell 18 percent in the first quarter. While jewelry consumption rose 10 percent, demand for bars and coins sank 55 percent, the London-based group said today.

Last year, gold slumped 28 percent, ending a 12-year rally, amid expectations that the Fed would cut asset purchases as the economy improves. Bullion climbed 70 percent from December 2008 to June 2011 as the central bank bought debt and held borrowing costs near zero percent.

The Fed will release minutes from its latest meeting tomorrow.

Silver futures for July delivery advanced 0.2 percent to $19.399 an ounce on the Comex.

Deficit Widens

On the New York Mercantile Exchange, platinum futures for July delivery fell 0.1 percent to $1,468.90 an ounce. Palladium futures for June delivery gained 1.3 percent to $825.85 an ounce. The price climbed to $830, the highest since August 2011.

Platinum consumption will top supply by 1.22 million ounces, compared with 940,000 ounces in 2013, London-based Johnson Matthey Plc said in a report. The palladium deficit will expand to 1.61 million ounces, from 371,000 ounces last year. The shortfalls would be the biggest ever, based on data going back to 1975 for platinum and 1980 for palladium on the company’s website.

To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net

To contact the editors responsible for this story: Millie Munshi at mmunshi@bloomberg.net Joe Richter

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.