Feb. 25 (Bloomberg) -- Gold futures climbed to the highest in almost 17 weeks on speculation that a sputtering U.S. economy will boost demand for the metal as an alternative investment.
U.S. consumer confidence fell more than forecast in February from January, an index from the New York-based Conference Board showed today. Home prices rose at a slower pace in the 12 months that ended in December, according to a separate report. Russia’s deputy finance minister said Ukraine faces a “high” chance of defaulting on its sovereign debt. Gold has gained 12 percent this year.
“People are concerned about U.S. economic growth, and that’s why many people have turned bullish” on the metal as a haven, Adam Klopfenstein, a senior market strategist at Archer Financial Services in Chicago, said in a telephone interview. “Gold is also finding some support from the ongoing political turmoil” in Ukraine, he said.
Gold futures for April delivery rose 0.4 percent to settle at $1,342.70 an ounce at 1:48 p.m. on the Comex in New York. Earlier, the price reached $1,343.60, the highest for a most-active contract since Oct. 30.
This month, gold has jumped 8.3 percent, heading for the biggest monthly gain in two years and the first consecutive advance since August. The metal rallied even as the Federal Reserve lowered its bond-buying program by $10 billion a month in both January and February, reducing purchases to $65 billion.
Gold surged 70 percent from December 2008 to June 2011 as the central bank pumped more than $2 trillion into the financial system.
Last year, gold plunged 28 percent, the most since 1981. Some investors lost faith in the metal amid a global equity rally and muted U.S. inflation.
The 14-day relative-strength index for futures topped 70 for the third straight session, a signal that prices may be set to decline.
“Even though technicals are strong, there are resistance levels on the near horizon -- the psychological $1,350 being one such barrier, and overbought RSI signals now pushing above the 70 level for the first time since last August suggesting a correction is likely,” Tim Gardiner, a managing director at TD Securities Inc. in New York, said in a report.
Silver futures for May delivery fell 0.4 percent to $22.001 an ounce on the Comex. Yesterday, the price reached $22.215, the highest since Oct. 31.
Palladium futures for June delivery dropped 0.9 percent to $738.55 an ounce on the New York Mercantile Exchange, the biggest drop since Jan. 27.
Platinum futures for April delivery gained 0.1 percent to $1,442.60 an ounce. Earlier, the metal reached $1,445, the highest since Jan. 24.
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