Jan. 4 (Bloomberg) -- Gold futures rose to the highest in two weeks on demand for a haven as the European Union moved closer to halting oil purchases from Iran, stepping up the confrontation over the Islamic republic’s nuclear program.
EU foreign ministers may announce harsher sanctions on Iran’s energy and banking industries at a meeting on Jan. 30 after Greece ended objections to an oil embargo, EU spokesman Michael Mann said. The move will help in “tightening the noose around Iran economically,” the U.S. State Department said. In the fourth quarter, gold fell for the first time since 2008.
“The safe-haven story is back because of the political developments,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview. “Also, we are seeing some bargain hunters return at current levels.”
Gold futures for February delivery gained 0.8 percent to settle at $1,612.70 an ounce at 1:41 p.m. on the Comex in New York. After the close, the price reached $1,619.80 in electronic trading, the highest for a most-active contract since Dec. 21.
Gold may rally to $2,400 this year, Citigroup Inc. said today. The record was $1,923.70 on Sept. 6.
The correction has “run its course and a rally is now back on the cards,” Tom Fitzpatrick, the chief technical analyst at Citibank in New York, said in a report.
UBS AG said today that its physical gold sales to India, the world’s top buyer, doubled from yesterday.
“As the new year begins, physical demand is evident,” Edel Tully, a UBS analyst, said in a report. China’s “gold appetite” has been elevated since mid-December, she said.
Silver futures for March delivery fell 1.6 percent to $29.097 an ounce on the Comex. Earlier, the price reached $29.74, the highest since Dec. 21.
On the New York Mercantile Exchange, palladium futures for March delivery fell 1.5 percent to $653.55 an ounce. Platinum futures for April delivery dropped 0.4 percent to $1,426.30 an ounce.
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