Bloomberg News

Gold Gains in New York as Central Bank Buying May Support Demand

June 16, 2011

June 16 (Bloomberg) -- Gold gained in New York as central bank buying may support demand.

Central banks will be net buyers of gold this year and probably next year, World Gold Council Managing Director Marcus Grubb said at a conference in London today. They have already bought 129 metric tons this year through April, exceeding last year’s total of 90 tons, he said.

“I wouldn’t be surprised if this is contributing to the slight price move up today,” said Mark O’Byrne, executive director of Goldcore Ltd. in Dublin. “This could be the beginnings of the eurozone central banks buying gold as a monetary asset in order to protect the euro,” he wrote in a report on Goldcore’s website today.

Gold for August delivery rose $4.30, or 0.3 percent, to $1,530.50 an ounce by 9:03 a.m. an ounce on the Comex in New York. Gold for immediate delivery was little changed at $1,529.30 an ounce.

The euro fell for a second day against the dollar as speculation the Greek debt crisis is deteriorating damped demand for the region’s assets. Gold traded at a record in British pounds.

Greece’s Prime Minister George Papandreou said he will reshuffle his cabinet and seek a confidence vote. He sought to reassert his authority in a televised address last night hours after police used tear gas to break up protests in central Athens and media reported he was in talks to step down in favor of a unity government.

--With assistance from Nicholas Larkin in London. Editors: Claudia Carpenter, John Deane

To contact the reporter on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.


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