Bloomberg News

Gold Rises on Physical Metal Demand, Commodity, Equity Rallies

October 14, 2011

Oct. 14 (Bloomberg) -- Gold futures rose, capping the biggest weekly gain since early September, as demand climbed for jewelry and coins, while commodities and equities rallied.

Commodities headed for the biggest weekly gain since December, and global equities were poised for the largest weekly rally since July as the Group of 20 began talks to tame Europe’s debt crisis and U.S. retail sales topped estimates by analysts. Gold demand may climb before a religious festival this month in India, the world’s top consumer of the precious metal, and the country’s wedding season.

“Gold remains underpinned by good volumes of physical and retail investment purchases,” James Moore, an analyst at TheBullionDesk.com in London, said in a report. “Following the washout of fund and speculation-investment longs, the market is well placed to trade higher.”

Gold futures for December delivery rose 0.9 percent to close at $1,683 an ounce at 1:41 p.m. on the Comex in New York. The metal advanced 2.9 percent this week.

Levels of physical demand are “some of the strongest seen since at least 2009,” Standard Bank Plc said in a report.

“Gold has been moving in positive correlation with risk assets of late,” UBS AG analysts including London-based Edel Tully said in a report. “This suggests that there is hybrid space that gold will occupy in the months ahead, one which benefits from a degree of increasing cyclical risk and a sufficient dose of sovereign risk.”

Silver futures for December delivery rose 1.6 percent to $32.173 an ounce on the Comex. The price gained 3.8 percent this week.

On the New York Mercantile Exchange, palladium futures for December delivery advanced 4.5 percent to $620.55 an ounce. This week, the price climbed 5.9 percent, the most this year.

Platinum futures for January delivery gained 1.5 percent to $1,554.90 an ounce. This week, the price rose 4.1 percent, the most since mid-August.

--With assistance from Yi Tian in New York. Editors: Patrick McKiernan, Steve Stroth

To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net

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


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