Gold Climbs for Third Day on Demand for Haven From Beleaguered Currencies
Bloomberg
Gold rose for the third straight day as volatility in the currency markets boosted demand for the precious metal as an alternative investment.
The euro fell to a three-week low against the dollar on speculation that Greece’s sovereign-debt crisis will worsen as talks over another aid package stalled. The greenback has dropped 12 percent in the past year against a basket of major currencies. Gold priced in British pounds rose to a record today.
“Gold is now a currency,” said Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter. “Gold is strong and growing stronger.”
On the Comex in New York, gold futures for August delivery rose $3.70, or 0.2 percent, to settle at $1,529.90 an ounce at 1:46 p.m.. The price gained 0.7 percent in the previous two sessions. The metal has advanced 24 percent in the past 12 months.
Implied volatility for one-week Eurodollar options surged to the highest since November. The measure signals the expected pace of swings in the underlying currency.
Gold rose to a record $1,577.40 on May 2 as escalating sovereign-debt woes and record-low U.S. borrowing costs increased the appeal of the metal as an alternative to currencies. The price denominated in euros reached an all-time high on May 25.
Roll the Dice
“Investors don’t want to roll the dice on being caught in one particular currency or the other,” said Adam Klopfenstein, a senior strategist at Lind-Waldock, a broker in Chicago. “There is gravitation toward the gold market to diversify away from paper currencies.”
Silver futures for July delivery rose 14.9 cents, or 0.4 percent, to $35.559 an ounce on the Comex. The price has jumped 93 percent in the past year.
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Gold Climbs Past $1,500 as the Dollar Weakens
Marketwatch
Gold futures edged higher Monday morning, as weakness in the U.S. dollar helped boost interest among investors following Friday’s more than $13-an-ounce drop in prices.
Gold prices had fallen earlier Monday as the dollar initially gained following news of the arrest of the head of the International Monetary Fund, Dominique Strauss-Kahn.
“The increased attention to global sovereign debt problems with, of course, lousier sentiment over the weekend resulting partially from the Strauss-Kahn event has given a solid open to gold at the open,” said Richard Hastings, a marco strategist at Global Hunter Securities.
Gold for June GCM11 -0.03% delivery climbed $8 to $1,501.60 an ounce on the Comex division of the New York Mercantile Exchange. The contract touched a low of $1,486 earlier.
Silver prices were also higher, with silver for July delivery SIN11 -2.32% adding 13.7 cents to $35.15 an ounce after a low of $34.
“There is still a lot to fret about here for an average investor who remains tense over debt troubles in the monetary union and [investors] will think twice about getting out of those gold longs in the near term,” Andrey Kryuchenkov, an analyst at VTB Capital said in a Monday note to clients.
“It will be important to keep an eye on Eurozone inflation estimates this week,” he said. “In the meantime, we continue to swing back and forth with risk sentiment while still expecting range trading to continue from here.”
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Gold Climbs to Record as Debt Concern, Inflation Boost Investment Demand
Bloomberg
Gold rose to a record for the fifth straight session as a weaker dollar and debt concerns boosted demand for an alternative investment. Silver rose above $46 an ounce to a 31-year high.
Gold reached an all-time high $1,509.60 an ounce in New York as the dollar slid to the lowest level since August 2008 against a basket of six major currencies. Greek two- and 10-year government-bond yields reached euro-era records amid speculation the nation won’t be able to avoid restructuring its debts.
“The key element determining gold’s near-term direction right now is the U.S. dollar,” Edel Tully, an analyst at UBS AG in London, said today in a report to clients. “Sovereign-debt concerns in U.S. and Europe along with inflation fears provide a good backdrop for gold.”
Gold futures for June delivery rose $3.70, or 0.2 percent, to $1,502.60 an ounce at 10:36 a.m. on the Comex in New York. The most-active contract has posted a record 10 times this month. The metal for immediate delivery in London rose as much as 0.4 percent to a record $1,509 before retreating.
The U.S. Dollar Index dropped as much as 0.9 percent on speculation that the Federal Reservewill be slow to raise borrowing costs. Central banks in Europe and Asia have raised interest ratesto help combat accelerating consumer prices.
S&P Revision
The Fed has kept the benchmark rate between zero percent and 0.25 percent since December 2008 and pledged to purchase $600 billion in Treasuries through June to stimulate the economy. Standard & Poor’s earlier this week revised its debt outlook for the U.S. to negative from stable.
The U.S. Treasury Department projects the government could reach its debt ceiling limit of $14.3 trillion as soon as mid- May and run out of options for avoiding default by early July.
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Gold Climbs to Record on Demand for Inflation-Hedge; Silver Price Tops $40
Bloomberg
Gold rose, setting a record for the fourth time this week, as a weakening dollar boosted demand for the precious metal as an alternative asset and an inflation hedge. Silver climbed above $40 an ounce to a 31-year high.
Gold rose to $1,476.20 an ounce in New York, the highest ever, after the dollar slid to the lowest level since December 2009 against a basket of six major currencies. Crude oil touched a 30-month high, and the European Central Bank yesterday raised borrowing costs from a record low to fight accelerating prices.
“The Federal Reserve isn’t anywhere near an inflation fight as the ECB,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. “Gold’s move is about the weakness in the dollar. Inflation is the buzzword, and it’s the impetus behind the trade.”
Gold futures for June delivery rose $13.60, or 0.9 percent, to $1,472.90 at 11:44 a.m. on the Comex in New York. Gold for immediate delivery in London climbed as much as 1.2 percent to a record $1,474.90.
Silver futures for May delivery advanced 89.8 cents, or 2.3 percent, to $40.45. Earlier, the price touched $40.48, the highest since January 1980, the year futures reached a record $50.35.
The difference between yields on U.S. 10-year notes and Treasury Inflation Protected Securities, a gauge of trader expectations for inflation, widened to as much as 2.62 percentage points, the most in 33 months. The ThomsonReuters/Jefferies CRB Index of 19 commodities rose to the highest since September 2008, led by gains in cotton.
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Oil Climbs, Stocks Fall on Libya Uprising; Treasuries, Gold Gain
BusinessWeek
Michaell Regan
Oil climbed for the third time in four days, snuffing out gains in stocks, amid concern petroleum facilities in Libya will be damaged as violence escalates. Treasuries, gold and the Swiss franc advanced.
Oil rose 0.3 percent to $105.33 a barrel. The Standard & Poor’s 500 Index fell 0.4 percent to 1,316.08 at 10:15 a.m. in New York, with technology shares the biggest drag after networking equipment maker Finisar Corp.’s forecast trailed estimates. The Stoxx Europe 600 Index erased a 0.5 percent gain. Ten-year Treasury yields lost three basis points to 3.53 percent. Gold rose 0.4 percent and the franc strengthened against all 16 peers as investors pursued haven assets.
Oil reversed most of yesterday’s drop as Muammar Qaddafi stepped up attacks on towns in western Libya and the Ras Lanuf refinery, the country’s largest crude-processing plant, was shut amid fighting. The S&P 500 rallied 0.9 percent yesterday, extending the rebound from its bear-market low exactly two years ago today to 95 percent.
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Gold Quickly Climbing the Wall of Worry
MarketWatch
Bullion’s stunning rally Thursday increases the odds that it is, adding strong technical support to the bullish message already being sent by contrarian analysis.
Gold for April delivery /quotes/comstock/21e!f:gc\j11 (GCJ11 1,351, +18.90, +1.42%) traded 1.6% higher near the close of trading on the Comex division of the New York Mercantile Exchange. See more on Thursday’s push higher in gold futures.
In just a couple of hours, bullion rose $30 a ounce — in one fell swoop erasing nearly a third of its correction since New Year’s. The SPDR Gold Trust /quotes/comstock/13*!gld/quotes/nls/gld (GLD 131.92, +1.47, +1.13%) paints a vivid picture.
Explosive rallies such as this are a hallmark of what often can happen when there is excessive pessimism, according to contrarian analysis.
As evidence of that pessimism, consider the average recommended gold exposure among a subset of the shortest-term gold timers tracked by the Hulbert Financial Digest (as represented by the Hulbert Gold Newsletter Sentiment Index, or HGNSI). This average recently dipped below zero, which meant that the average gold timer was allocating some of his gold portfolio to shorting gold.
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Gold Climbs Above $1,420/oz on Haven Buying
Reuters
Jan Harvey
Gold rose above $1,420 an ounce for the first time since mid-November on Monday as speculation U.S. authorities will extend monetary easing and concern over euro zone debt lifted buying of the metal as a haven from risk.
While strength in the U.S. unit kept a tight rein on gains in dollar-priced gold, gold hit record highs in sterling and euro terms, and Japanese yen-denominated bullion hit its highest since early 1983. Silver prices also rallied to 30-year highs.
Spot gold rose as high as $1,420.31 an ounce and was bid at $1,418.25 at 1704 GMT, against $1,414.35 late on Friday. It hit a record $1,424.10 early in November. U.S. gold futures for December delivery rose $13.30 an ounce to $1,419.50.
Sterling-priced gold reached a record 906.06 pounds an ounce, euro-priced gold reached a high of 1,070.80 euros an ounce, while gold denominated in yen hit its highest since February 1983 at 117,541 yen an ounce.
Fresh concerns emerged over the stability of the foreign exchange markets after Federal Reserve Chair Ben Bernanke said on Sunday the bank could buy more than the $600 billion in U.S. government bonds it has committed to purchase.
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Gold Climbs as Investors Seek Safety After Korea Clash
MarketWatch
Claudia Assis
Gold futures rose 1.5% Tuesday after military hostilities on the Korean peninsula gave investors more reason to seek safety in the metal.
Gains in gold for December delivery /quotes/comstock/21e!f:gc\z10 (GCZ10 1,376, +18.30, +1.35%) accelerated during the session, and the metal settled up $19.80 to $1,377.60 an ounce on the Comex division of the New York Mercantile Exchange.
Gold futures rose modestly Monday, helped by worries about European sovereign debt as investors wanted to hear more details about a bailout package for Ireland.
North Korea and South Korea, however, have become the latest focus of worry for investors.
The two countries exchanged artillery fire at a South Korean island near their western border, according to reports. South Korea’s military had gone to its highest state of alert. Read more on Korean tensions.
A rising dollar kept gold prices from ballooning even higher. The dollar index /quotes/comstock/11j!i:dxy0 (DXY 79.69, +1.01, +1.28%) , which gauges the U.S. unit against a basket of six other currencies, gained 1.2% to 79.615.
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Gold Settles $19.80 Higher Today
International Business Times
Mike Daly
Gold continued its rally today as global uncertainties offered investors chose safer haven alternative investments today. The fragility in the European Union remains prevalent as comments from Germany's Chancellor Angel Merkel to reporters in Berlin bear out. She stated that is cause for "great concern"...and said the Euro was in an "exceptional serious situation"...She also revealed that Germany and the Netherlands were working diligently on a permanent crisis resolution mechanism.
North Korea launched artillery shells on a South Korean island of Yeonpyeong causing several casualties and escalating the tensions of the region... Earlier in the week North Korea revealed their hidden uranium enrichment program which indicates that their nuclear capabilities are much further along than previous estimates. Gold is often a refuge for investors during warring environments.
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