Bloomberg News

Gold, Silver Prices Rise on Haven Demand Amid Economic Woes

September 29, 2011

Sept. 29 (Bloomberg) -- Spot gold and silver prices rose for the second time in three days on demand for a haven amid concern that the European debt crisis will choke the worldwide economy.

International investors expect the economy to relapse into a recession, with more than one in three forecasting a global meltdown within the next year, a Bloomberg poll showed. The head of Europe’s markets regulator warned banks to be consistent in valuations of sovereign debt amid concern that some lenders failed to record sufficient losses on Greek bonds.

“There is so much nervousness out there about every single thing we hear from Europe,” Sterling Smith, an analyst at Country Hedging Inc. in St. Paul, Minnesota, said in a telephone interview. “Also, gold is attractive as the fear of slowdown is gathering momentum.”

Gold for immediate delivery rose $2.63, or 0.2 percent, to $1,611.43 an ounce at 3:12 p.m. New York time. Earlier, the price gained as much as 1.6 percent.

The metal has slumped 16 percent from a record $1,921.15 on Sept. 6 on investor sales to cover losses during a rout in global equity markets.

Spot silver rose 49.88 cents, or 1.7 percent, to $30.3675 an ounce.

Gold futures for December delivery fell 80 cents to settle at $1,617.30 on the Comex in New York. The price rose as much as 1.2 percent and fell 2 percent.

Silver futures for December delivery rose 38.8 cents, or 1.3 percent, to $30.52. The metal has tumbled 39 percent from a 31-year high of $49.845 on April 25.

On the New York Mercantile Exchange, platinum futures for January delivery fell $5.20, or 0.3 percent, to $1,532.90 an ounce. Palladium futures for December delivery dropped $11.15, or 1.8 percent, to $623.60 an ounce.

--Editors: Patrick McKiernan, Steve Stroth

To contact the reporters for this story: Debarati Roy in New York at droy5@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net


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