Sept. 30 (Bloomberg) -- Gold advanced in New York as the metal’s drop this month and concern that economic growth is slowing boosted demand for the precious metal.
German retail sales fell by more than economists forecast in August, Chinese manufacturing shrank for a third month and consumer spending in the U.S. slowed in August. The metal, which surged to a record $1,923.70 an ounce on Sept. 6, is heading for its biggest monthly loss since October 2008 as financial turmoil prompted some investors to sell the metal to cover losses in other markets.
“The macro concerns remain,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “Physical buying is lending support to gold.”
Gold futures for December delivery gained $4.80, or 0.3 percent, to $1,622.10 at 11:21 a.m. on the Comex in New York. Before today, the precious metal declined 12 percent this month, including the worst three-session slump since 1983.
Still, gold is poised to gain for a 12th straight quarter and is in the 11th year of a bull market, the longest winning streak since at least 1920 in London.
Thailand, Bolivia and Tajikistan boosted gold reserves by a combined 18.2 metric tons in August, valued at $1 billion at the month’s average price. Central banks are expanding reserves for the first time in a generation.
“What we’re trying to understand is whether or not that soft patch that we’re going through, both in terms of consumer confidence and real spending, is going to be extended into the balance of 2012,” Lincoln Ellis, managing director at the Linn Group and chief investment officer at Strategic Financial Group, said in a Bloomberg Television interview.
“I would expect gold to trade in this $1,500 to $1,700 range throughout the next six to eight weeks” as some investors sell the metal to cover losses elsewhere, Ellis said.
Silver futures for December delivery fell 34.7 cents, or 1.1 percent, to $30.175 an ounce in New York, extending a quarterly loss to 13 percent, the most in three years. Through yesterday, the metal was down 1.3 percent this year after touching a 31-year high of $49.845 on April 25.
--With assistance from Glenys Sim in Singapore. Editors: Daniel Enoch, Millie Munshi.
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