Nov. 8 (Bloomberg) -- Gold futures topped $1,800 an ounce for the first time in almost seven weeks on concern that European leaders will be unable to contain the region’s debt crisis, fueling demand for the precious metal as a haven.
Italian Prime Minister Silvio Berlusconi failed to muster an absolute majority on a routine parliamentary ballot today, fueling more calls for his resignation. Federal Reserve Chairman Ben S. Bernanke signaled more monetary stimulus may be needed to cut unemployment, while the European Central Bank last week unexpectedly lowered interest rates. Gold has rallied more than 11 percent since the end of September.
“The turmoil in Europe has brought the fear trade back to gold,” Lance Roberts, the chief executive officer of Houston- based Streettalk Advisors, said in a telephone interview. “Also, a renewed wave of policy easing by central banks is helping gold.”
Gold futures for December delivery rose 0.5 percent to close at $1,799.20 an ounce at 1:47 p.m. on the Comex in New York, after touching $1,804.40, the highest since Sept. 21. Prices fell to $1,785.70 in after-hours trading.
Earnings growth in Europe will stagnate in 2012 as governments rein in spending and banks shrink their balance sheets, according to Gary Baker, the London-based head of European equity strategy at Bank of America Corp.
“Fundamentals are stronger than before, with the EU crisis more complicated than before,” Pradeep Unni, an analyst at Richcomm Global Services in Dubai, said in a report. “Retracements and corrections are possible as we climb above $1,800, but stay invested.”
Berlusconi offered to resign as soon as Parliament approves austerity measures in a vote next week, Italian President Giorgio Napolitano said tonight in an e-mailed statement after meeting Berlusconi in Rome.
Bullion is in the 11th year of a bull market, and futures reached a record $1,923.70 in New York on Sept. 6 as investors sought to diversify away from equities and some currencies. The precious metal has gained 27 percent this year.
Silver futures for December delivery advanced 0.9 percent to close at $35.153 an ounce on the Comex, rising for the second straight day.
On the New York Mercantile Exchange, platinum futures for January delivery rose 0.9 percent to $1,673.10 an ounce. Palladium futures for December delivery climbed 2.3 percent to $677.25 an ounce.
--With assistance from Phoebe Sedgman in Melbourne, Adam Haigh and Nicholas Larkin in London. Editors: Steve Stroth, Daniel Enoch
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