Gold, Silver Futures Gain as Equity Loss Boosts Haven Demand

April 15 (Bloomberg) -- Gold and silver rose in New York as a slide in worldwide equities boosted demand for precious metals as a store of value.

The MSCI World Index of stocks fell as much as 1 percent after declining 0.5 percent yesterday. Investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, is up 45 percent this year as investors sought a haven from financial turmoil.

“Any good move down in equities revives that safety bid for gold,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago.

Gold futures for June delivery rose $1.50, or 0.2 percent, to $893.50 an ounce on the Comex division of the New York Mercantile Exchange. Earlier, the price climbed as much as 1.1 percent. The metal is up 1 percent this year.

Silver futures for May delivery rose 3.5 cents, or 0.3 percent, to $12.80 an ounce. The price has gained 13 percent this year.

Gold’s gains were limited on speculation that inflation will slow, eroding demand for a hedge.

U.S. consumer prices in March posted their first 12-month decline since 1955, government data showed today. Gold soared 7.8 percent on March 19 after the Federal Reserve sparked concerns that inflation would accelerate by announcing plans to buy long-term debt.

“We’re not fighting inflation yet, so it’s premature to buy gold for inflationary purposes,” Lesh said.

Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter, recommended investors sell gold near the spot price of $891.

“The uptrend that extends back into the lows of last November and December has been decisively broken, and since then, the most recent rally attempts have failed at progressively lower levels, while the lows are steadily lower too,” Gartman said.

This year, gold futures traded as low as $801.50 on Jan. 15 and as high as $1,007.70 on Feb. 20.