Bloomberg News

Gold Set for Fourth Weekly Gain on Europe Debt, Growth Concern

June 10, 2011

June 10 (Bloomberg) -- Gold may advance, set for the fourth weekly gain, as concern about Europe’s sovereign-debt crisis and slowing economic growth spur demand for the precious metal as an alternative investment. Platinum rose to a one-month high.

Immediate-delivery bullion was little changed at $1,542.45 an ounce at 4:15 p.m. Seoul time, climbing 0.1 percent for the week. Futures for August delivery were also little changed at $1,544.40 an ounce on the Comex in New York.

“It looks like there’s really no way out,” Bruce Ikemizu, head of commodity trading at Standard Bank Plc, said by phone from Tokyo, referring to the European debt crisis. “That’s still bullish for gold.”

The European Central Bank signaled a July interest rate increase even as higher borrowing costs may exacerbate the crisis that’s threatening to push Greece toward a default. The U.S. Federal Reserve this week said the economy expanded at a “steady pace” in most of the country while slowing in four of 12 regions, underscoring Chairman Ben S. Bernanke’s statement that record stimulus should be maintained to bolster a “frustratingly slow” recovery.

Still, the price of gold is likely to trade between $1,530 an ounce and $1,550 an ounce next week as physical buyers wait for prices to drop below $1,530, Ikemizu said.

Bullion has advanced 27 percent in the past year, reaching a record $1,577.57 an ounce on May 2. The U.S. central bank has kept its benchmark interest rate at zero percent to 0.25 percent since December 2008.

Silver for immediate delivery declined 0.3 percent to $37.44 an ounce. The price is up about 3.3 percent this week, rebounding from a 4.6 percent loss last week.

Cash platinum rose as much as 0.5 percent to $1,849.25 an ounce, the highest level since May 4, and last traded at $1,839.50 an ounce. Palladium for immediate delivery traded little changed at $817 an ounce, holding onto this week’s gains of 4.2 percent. The metal yesterday rose to $819.38, the highest price since March 7. Both metals are set to climb for the fourth week.

--Editors: Jarrett Banks, Jake Lloyd-Smith

To contact the reporter on this story: Sungwoo Park in Seoul at

To contact the editor responsible for this story: James Poole at

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