Gold Tops $950 on Demand for Store of Value; Silver Is Steady
Feb. 12 (Bloomberg) -- Gold topped $950 an ounce, reaching the highest since July, on concern that the recession and banking crisis may deepen, boosting the appeal of the precious metal as a store of value. Silver was little changed
Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, reached a record 935.1 metric tons yesterday. A $789 billion stimulus plan moved toward passage in Congress, and U.S. Treasury Secretary Timothy Geithner has told lawmakers he needs more time to develop a $2 trillion plan to rescue banks. Gold has climbed 7.3 percent this year.
“We see substantial buying with people putting it in their backyards,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “The fear purchasers are going to scoop up gold and keep it rising.”
Gold futures for April delivery rose $4.70, or 0.5 percent, to $949.20 an ounce on the Comex division of the New York Mercantile Exchange. Earlier, the price reached $954, the highest for a most-active contract since July 22.
Silver futures for March delivery fell 1 cent to $13.51 an ounce. The metal fell 24 percent last year, while gold gained 5.5 percent.
U.S. equities dropped, extending a global slump, after the government reported jobless claims rose to a record. Speculation that the government’s plan to revive the economy will fail also drove stocks lower. The Standard & Poor’s 500 Index is down more than 9 percent this year after tumbling 38 percent in 2008.
‘Dangerous’
“This is a dangerous and volatile time in the economy, and people remain scared and unsure of what to do with their money,” said Ron Goodis, a retail trading director at Equidex Brokerage Group Inc. in Closter, New Jersey. “Gold is perceived as a safe haven and should continue to be an attractive alternative to almost anything else.”
Sales of 1-ounce American Eagle gold coins more than quadrupled in January to 92,000 ounces from a year earlier, the U.S. Mint said this week. The Mint sold 794,000 ounces of the coins in 2008, including 176,000 in December, the highest since January 1999.
Yesterday, the coin cost $1,004.80 an ounce, almost $66 more than the spot price of gold.
Still, gold’s gains were limited after rallying 5.8 percent in the previous two sessions. The seven-day relative-strength index topped 69 yesterday. A reading of 70 signals that prices may head lower in the near term. Earlier, futures dropped as much as $8.
“Gold has had a sharp run up, and there’s some backing and filling,” said Marty McNeill, a trader at R.F. Lafferty Inc. in New York. “There’s no real change in the world situation. Gold is a safe haven, and people will continue to flock to it.”
0 comments :
Post a Comment