Gold Rebounds on Demand for Haven Investment; Platinum Advances

April 7 (Bloomberg) -- Gold rose for the first time in four sessions on speculation that the credit crisis will deepen, boosting the precious metal’s appeal as a haven.

Bank stocks headed lower after the Times of London reported that the International Monetary Fund will raise its toxic-debt estimate to $4 trillion. Gold reached $1,007.70 an ounce on Feb. 20, this year’s high, before a monthlong surge in equities curbed demand for the metal.

“People are starting to question the equity rally,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. “We’re not halfway through the credit crisis and that could put a floor on gold prices.”

Gold futures for June delivery rose $10.50, or 1.2 percent, to $883.30 an ounce on the Comex division of the New York Mercantile Exchange. Gold still is down 0.1 percent this year, after eight straight annual gains.

The IMF will raise its estimates for U.S.-originated bad debt to $3.1 trillion from a January prediction of $2.2 trillion, with estimates of another $900 billion of toxic assets from Europe and Asia, the Times newspaper said today, without describing where it got the information.

U.S. stocks fell for a second straight day after investor George Soros said the rally in equities won’t last. Shares in Europe and Asia also declined. Before this week, the Standard & Poor’s 500 Index had gained 23 percent since March 6 while gold declined 4.8 percent.

Diversifying Risk

“The problems in the financial markets have not gone away and neither are they likely to anytime soon,” analysts at Scotia Capital said today in a report. “The trend to diversify risk is likely to remain strong and that should underpin good long-term demand for gold, especially into dips.”

Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, has remained unchanged at 1,127.37 metric tons for two straight days. Bullion held in the Trust has gained 44 percent this year.

Silver, platinum and palladium, which have wider industrial uses than gold, also gained.

Silver futures for May delivery rose 10 cents, or 0.8 percent, to $12.21 an ounce. The metal has gained 8.1 percent this year.

Platinum futures for July delivery climbed $22.40, or 1.9 percent, to $1,175 an ounce on the New York Mercantile Exchange. The metal is up 25 percent this year.

Palladium futures for June delivery rose 25 cents, or 0.1 percent, to $226 an ounce on the Nymex. The price has advanced 20 percent this year.

Stockpiling Platinum

Price gains may stall for palladium and platinum after buyers take advantage of last year’s price decline to restock supply, Scotia Capital said. Platinum lost 38 percent and palladium declined 50 percent in 2008. Gold gained 5.5 percent last year while silver lost 24 percent.

“We fear we are seeing a bear market rally in the platinum group metals,” said Scotia Capital. “Once the restocking has run its course, there is a danger that industrial demand slows again, putting all the onus back on investors.”