Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Gold, Silver Rise as Europe’s Debt Concerns Boost Haven Demand

Don't Miss Out —
Follow us on:

Nov. 11 (Bloomberg) -- Gold futures rose as Europe’s mounting fiscal woes boosted the appeal of precious metals as a haven. Silver prices climbed 2 percent.

Irish and Spanish government bonds slumped for the 13th straight session, and the euro dropped on escalating concern that countries will be forced to restructure their debt. Gold has gained 28 percent this year, reaching a record $1,424.30 an ounce on Nov. 9, on bets the Federal Reserve’s plan to buy back more bonds will erode the value of the dollar.

“The re-emergence of sovereign risk should ultimately help the yellow metal,” Edel Tully, an analyst at UBS AG in London, said in a report.

Gold futures for December delivery rose $4, or 0.3 percent, to settle at $1,403.30 at 2 p.m. on the Comex in New York.

Silver futures for December delivery climbed 54 cents to $27.405 an ounce. Yesterday, the metal plunged 7.1 percent, the most since Dec. 1, 2008. On Nov. 9, the price reached $29.34, a 30-year high.

France backed Germany’s efforts to make investors share the costs of restructuring sovereign debt. Spain’s economy stalled and Ireland’s fiscal crisis drove down bank stocks. Gold priced in euros reached a record in June, when investors were concerned that Greece may go bankrupt.

‘Inexorably Higher’

Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter, recommended holding gold denominated in other currencies to hedge against the relative strength in the dollar.

“The trend is inexorably toward higher gold prices in euro terms,” Gartman said. “The buyers of gold at the margin are the sellers of euros, too.”

The dollar rose for the fifth straight session against a basket of major currencies including the euro.

Gold also gained after a report showed China’s inflation accelerated to a two-year high.

“Rising inflation is one of the single biggest factors driving China’s appetite for gold,” Tully of UBS said.

Gold’s gains may be limited in the short term should the dollar extend a rally, analysts at Bank of America Merrill Lynch said today in a report.

“A recovery of the U.S. currency, for instance because of concerns over debt in Europe, may remove price support to metals,” Bank of America Merrill Lynch said.

Platinum futures for January delivery rose $7.90, or 0.5 percent, to $1,745.80 an ounce on the New York Mercantile Exchange.

Palladium futures for December delivery rose $7.40, or 1.1 percent, to $704.15 an ounce.

To contact the reporters on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.