July 3 (Bloomberg) -- Gold futures rose as Europe’s debt crisis and escalating tensions in Egypt spurred demand for the precious metal as a haven. Silver also advanced.
Two Portuguese ministers resigned in a dispute with Prime Minister Pedro Passos Coelho over handling of government debt, and borrowing costs rose in Spain and Italy. Egyptian President Mohamed Mursi sought to retain power with a call for an interim coalition government just before the expiration of a military deadline that could drive him from office. Gold futures dropped 23 percent last quarter, the most since at least 1975.
“Europe’s debt struggle is back in the forefront, and that is bringing some people to gold as a safety net,” Carlos Perez-Santalla, a New York-based broker at Marex North America LLC, said in an e-mailed report. “Some speculators are moving to gold because of the situation in Egypt.”
Gold futures for August delivery gained 0.7 percent to settle at $1,251.90 an ounce at 1:44 p.m. on the Comex in New York. Prices touched $1,179.40 on June 28, the lowest since Aug. 2, 2010. U.S. markets will be closed tomorrow for the Independence Day holiday.
Bullion has slipped 25 percent this year, wiping about $59.5 billion from the value of gold-backed exchange-traded product holdings, as some investors lost faith in it as a store of value and amid concern that the Federal Reserve may slow its asset purchases this year.
Purchases of physical gold continue to increase, and some investors are seeing lower prices as “an opportunity to jump in,” Scott Carter, the chief executive officer of Los Angeles-based Lear Capital, said in a Bloomberg Television interview.
Silver futures for September delivery climbed 2 percent to $19.70 an ounce in New York. The metal is down 35 percent this year, the most among the 24 commodities tracked by the Standard & Poor’s GSCI Spot Index, after touching $18.17 on June 28, the lowest since August 2010.
On the New York Mercantile Exchange, platinum futures for October delivery declined 1.5 percent to $1,346.80 an ounce, the biggest drop since June 26. Palladium futures for September delivery fell 0.5 percent to $685.70 an ounce, ending a four-session rally.
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