Bloomberg News

Gold Rebounds, Silver Pares Loss as Dollar Weakens Versus Euro

February 17, 2012

Feb. 16 (Bloomberg) -- Gold futures rebounded and silver pared losses as the dollar declined against the euro, increasing demand for the precious metals as alternative investments.

The greenback fell after Die Welt, a German newspaper, said the European Central Bank is exchanging Greek bonds for new securities, boosting speculation that Greece will win a second bailout. The MSCI All-Country World Index of equities rose as much as 0.5 percent after sliding 0.7 percent. Gold advanced for the second straight day.

“We are seeing people move back to equities and gold on the Greek headlines,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview.

Gold futures for April delivery rose 30 cents to close at $1,728.40 an ounce at 2:02 p.m. on the Comex in New York. Earlier, the price fell as much as 1.2 percent. In electronic trading after the settlement, the commodity gained as much as 0.2 percent to $1,731.60.

Yesterday, gold rose 0.6 percent. The metal has gained 10 percent this year.

“From a technical perspective, gold has been well supported on any dips toward $1,700,” Saeed Amen, an analyst at Nomura International Plc in London, said in an e-mail. “The tail-risk effect related to the Greece situation should also act as some support.”

Silver futures for March delivery fell 0.1 percent to $33.37 an ounce on the Comex. Earlier, the price dropped as much as 2.3 percent. The metal climbed 20 percent this year.

On the New York Mercantile Exchange, palladium futures for March delivery climbed 1.9 percent to $696.60 an ounce, ending a five-session slide. Platinum futures for April delivery fell 0.7 percent to $1,626.10 an ounce.

--With assistance from Allison Bennett in New York. Editors: Patrick McKiernan, Steve Stroth

To contact the reporters on 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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