Gold futures gained the most in seven weeks as commodities and equities rallied amid optimism that European leaders will take steps to resolve the region’s debt crisis.
The Standard & Poor’s GSCI index of 24 raw materials surged as much as 3.6 percent, while the MSCI All-Country World Index jumped as much as 4 percent. In the previous three sessions, gold tumbled 12 percent, the most since 1983, on sales by investors to cover losses in other markets amid mounting concern that the global economy would slump.
“Gold is behaving like a classic commodity and is moving in tandem with the equity market,” Adam Klopfenstein, a senior market strategist at MF Global Holdings Inc. in Chicago, said in a telephone interview. “The selloff was overdone.”
Gold futures for December delivery gained $57.70, or 3.6 percent, to settle at $1,652.50 an ounce at 1:33 p.m. on the Comex in New York, rising the most since Aug. 8. Yesterday, the metal tumbled as much as $104.80 to $1,535, the lowest since July 8.
Greek Prime Minister George Papandreou won parliamentary backing for a property tax to meet deficit-reduction targets required to avoid default.
The precious metal has gained 16 percent this year, surging to a record $1,923.70 on Sept. 6.
“There is a small but growing group who believe this pullback will prove to be a good buying opportunity,” Edel Tully, a London-based analyst at UBS AG, said in a report. “Gold needs to stabilize after suffering a good deal of reputational damage with recent wild moves.”
Silver futures for December delivery advanced $1.56, or 5.2 percent, to $31.536 an ounce, the biggest gain since July 13. In the previous three sessions, the price tumbled 26 percent, touching a 10-month low of $26.15.
On the New York Mercantile Exchange, platinum futures for January delivery climbed $28.40, or 1.8 percent, to $1,577.40 an ounce. Palladium futures for December delivery gained $22.55, or 3.6 percent, to $649.95 an ounce.