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Gold Rebounds on Demand for Haven Amid U.S. Budget Woes

Dec. 27 (Bloomberg) -- Gold futures advanced for the second straight day after U.S. Senate Majority Leader Harry Reid said that the budget dispute probably won’t be resolved before Jan. 1, boosting demand for the metal as a haven.

Republicans won’t cooperate, said Reid, a Nevada Democrat. The impasse leaves the U.S. closer to more than $600 billion in automatic tax increases and spending cuts set to begin in 2013.

“Reid’s statement is pushing people back to gold,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview.

Gold futures for February delivery rose 0.2 percent to settle at $1,663.70 an ounce at 1:58 p.m. on the Comex in New York. The metal has gained 6.2 percent this year, heading for a 12th straight annual increase, as central banks from the U.S. to China announced stimulus measures to bolster their economies.

Silver futures for March delivery advanced 0.7 percent to $30.24 an ounce. Earlier, the price dropped as much as 1.1 percent.

On the New York Mercantile Exchange, platinum futures for April delivery slipped 0.2 percent to $1,536 an ounce. Palladium futures for March delivery jumped 2.3 percent to $708.50 an ounce, the biggest gain since Nov. 23.

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

To contact the editor responsible for this story: Patrick McKiernan at pmckiernan@bloomberg.net

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