Gold rose for a second day on Wednesday to an eight-week high above $1,240 an ounce as the dollar fell against the euro and concern over economic growth hit equities, fuelling interest in the metal as a safe haven. Spot gold was bid at $1,237.70 an ounce at 1455 GMT, against $1,229.25 late in New York on Tuesday. US gold futures for December delivery rose $6.40 to $1,239.90, while gold priced in euros and sterling also hit multi-week highs.
Gold is benefiting from renewed investor demand for safe-haven assets as evidence of a slowing economy mounts, which in turn has pushed global equities to their lowest since early July, when a recovery in risk appetite led prices to retreat from June's record highs. "This recent leg-up and the quite significant move yesterday post the US housing data is perhaps that trend of safe haven inflows into gold resuming," said RBS analyst Daniel Major.
Prices rallied to a high of $1,241.25 an ounce as European equity markets were rattled by data showing new orders for long-lasting US manufactured goods rose far less than expected in July and new home sales unexpectedly fell in July to their slowest pace on record. US stock futures extended losses.
Gold priced in euros hit its highest since July 1 at 981.06 euros an ounce and was later bid at 979.46 euros an ounce against 973.59 euros. Sterling-priced gold reached its highest since mid-July at 803.40 pounds, before easing to 802.08 pounds from 797.96 pounds.
Any further signs of weakness in the US economy could spell further gains for gold, analysts said. "We could definitely see further price rises if the economy proves not to be that robust," said Commerzbannk analyst Daniel Briesemann. The WGC said in its quarterly demand trends report on Wednesday that India and China were likely to provide the main thrust to demand growth this year and predicted investment demand would stay strong.
It reported burgeoning bullion investment in the second quarter, notably from Europe, seat of the eurozone sovereign debt crisis. Demand for gold exchange-traded funds quintupled in the quarter, it said. Spot silver rose more than 2 percent to $18.76 an ounce from $18.34, extending gains after posting its biggest one-day rise in more than three weeks on Tuesday, echoing the climb in gold prices.
Holdings of the world's largest silver-backed ETF, New York's iShares Silver Trust, rose for the first time since July 13 that day, climbing just over 24 tonnes to 9,175.38 tonnes. Platinum was at $1,511.50 an ounce against $1,510, while palladium was at $487.50 against $482.50.
Comments
Comments are closed.