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http://www.bloomberg.com/apps/news?pid=20601012&sid=aLvWoPMlnHM8&refer=commodities
Gold Rises in London as Plunging Stocks Spur Search for Haven
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By Claudia Carpenter
March 6 (Bloomberg) -- Gold rose for a second day in London as plunging stock markets and concern about inflation prompted some investors to buy the metal as a refuge. Silver, platinum and palladium also gained.
The Dow Jones Industrial Average slid 4.1 percent yesterday and has lost 20 percent, entering a bear market, since U.S. President Barack Obama took office. Bullion, up 6.5 percent in 2009, may lead gains by commodities this year as investors seek an inflation hedge, Douglas Hepworth, research director at Gresham Investment Management LLC, said yesterday in Barcelona.
“U.S. investors are heavily buying gold and will keep buying,” Bayram Dincer, a commodities analyst at Dresdner Bank in Zurich, said today by e-mail. The metal will end the year at around $1,200 an ounce, Dincer said, compared with the current record of $1,037.20 a year ago.
Bullion for immediate delivery climbed as much as $9.99, or 1.1 percent, to $942.40 an ounce and was at $939.25 at 11:27 a.m. local time. Yesterday gold gained 2.9 percent, the most in two weeks. It’s set to end the week little changed after dropping 3.8 percent in the first three days.
April gold futures added $11.60, or 1.3 percent, to $939.40 an ounce in electronic trading on the New York Mercantile Exchange’s Comex division.
Some investors have become concerned about possible future inflation as governments and central banks spend trillions of dollars and lower interest rates in an effort to rescue financial companies and revive economies. Those steps have yet to return the U.S. economy, the world’s biggest, to growth or stem job cuts as companies seek to reduce costs in response to tumbling sales.
Rate Cuts
The U.S. economy probably lost more jobs in February than at any time since 1949, a plunge that may force further reductions in spending and send more Americans into bankruptcy, economists said before a Labor Department report due at 1:30 p.m. London time today. The European Central Bank and the Bank of England reduced interest rates yesterday.
Demand for gold has helped to reduce the metal’s tendency to move in the opposite direction from the dollar, according to Dresdner’s Dincer. Bullion and the U.S. Dollar Index, which gauges the greenback against six other currencies, both rose or dropped in three of February’s four weeks and in three of January’s five weeks.
Assets in the SPDR Gold Trust, the biggest exchange-traded fund holding the metal, were unchanged yesterday at a record 1,029.29 tons, a “bit of a disappointment,” said James Moore, an analyst at London-based TheBullionDesk.com. Investors may be purchasing bullion directly rather than via ETFs, he said.
Among other metals for immediate delivery, silver added 22 cents, or 1.7 percent, to $13.47 an ounce. Platinum gained $14, or 1.3 percent, to $1,077.50 an ounce, and palladium rose $2, or 1 percent, to $201.25 an ounce.
To contact the reporter on this story: Claudia Carpenter in London at [email protected]
Last Updated: March 6, 2009 06:30 EST
Gold Rises in London as Plunging Stocks Spur Search for Haven
Email | Print | A A A
By Claudia Carpenter
March 6 (Bloomberg) -- Gold rose for a second day in London as plunging stock markets and concern about inflation prompted some investors to buy the metal as a refuge. Silver, platinum and palladium also gained.
The Dow Jones Industrial Average slid 4.1 percent yesterday and has lost 20 percent, entering a bear market, since U.S. President Barack Obama took office. Bullion, up 6.5 percent in 2009, may lead gains by commodities this year as investors seek an inflation hedge, Douglas Hepworth, research director at Gresham Investment Management LLC, said yesterday in Barcelona.
“U.S. investors are heavily buying gold and will keep buying,” Bayram Dincer, a commodities analyst at Dresdner Bank in Zurich, said today by e-mail. The metal will end the year at around $1,200 an ounce, Dincer said, compared with the current record of $1,037.20 a year ago.
Bullion for immediate delivery climbed as much as $9.99, or 1.1 percent, to $942.40 an ounce and was at $939.25 at 11:27 a.m. local time. Yesterday gold gained 2.9 percent, the most in two weeks. It’s set to end the week little changed after dropping 3.8 percent in the first three days.
April gold futures added $11.60, or 1.3 percent, to $939.40 an ounce in electronic trading on the New York Mercantile Exchange’s Comex division.
Some investors have become concerned about possible future inflation as governments and central banks spend trillions of dollars and lower interest rates in an effort to rescue financial companies and revive economies. Those steps have yet to return the U.S. economy, the world’s biggest, to growth or stem job cuts as companies seek to reduce costs in response to tumbling sales.
Rate Cuts
The U.S. economy probably lost more jobs in February than at any time since 1949, a plunge that may force further reductions in spending and send more Americans into bankruptcy, economists said before a Labor Department report due at 1:30 p.m. London time today. The European Central Bank and the Bank of England reduced interest rates yesterday.
Demand for gold has helped to reduce the metal’s tendency to move in the opposite direction from the dollar, according to Dresdner’s Dincer. Bullion and the U.S. Dollar Index, which gauges the greenback against six other currencies, both rose or dropped in three of February’s four weeks and in three of January’s five weeks.
Assets in the SPDR Gold Trust, the biggest exchange-traded fund holding the metal, were unchanged yesterday at a record 1,029.29 tons, a “bit of a disappointment,” said James Moore, an analyst at London-based TheBullionDesk.com. Investors may be purchasing bullion directly rather than via ETFs, he said.
Among other metals for immediate delivery, silver added 22 cents, or 1.7 percent, to $13.47 an ounce. Platinum gained $14, or 1.3 percent, to $1,077.50 an ounce, and palladium rose $2, or 1 percent, to $201.25 an ounce.
To contact the reporter on this story: Claudia Carpenter in London at [email protected]
Last Updated: March 6, 2009 06:30 EST
