Bloomberg News

Gold Rebounds as Slump to Four-Month Low Spurs Investor Buying

May 10, 2012

Gold rebounded from the lowest level in four months as the metal’s slide, driven by Europe’s debt crisis and a stronger dollar, spurred buying from investors. Platinum and palladium advanced.

Spot gold rose for the first time in four days, gaining as much as 0.4 percent to $1,595.80 an ounce and trading at $1,594.55 at 3:20 p.m. in Singapore. The metal fell to $1,580.13 yesterday, the lowest since Jan. 3. Gold’s so-called 14-day relative-strength index, which dropped yesterday below the 30 level that may indicate a rebound, was at 31.435 today.

Gold slumped 3.2 percent in the first three days of this week as Greek politicians struggled to form a government following weekend elections, boosting speculation that the country may quit the euro zone.

“The drop was large and quick, so it’s not surprising to see some buying at these levels,” said Xiang Nan, an analyst at CITICS Futures Co., a unit of China’s biggest listed brokerage. “But the dollar looks to be strong in the near term and this will limit gains.”

June-delivery bullion was little changed at $1,595.20 on the Comex in New York, after falling to $1,578.50 yesterday. The euro rose 0.3 percent after declining for the past eight days.

Pasok party leader Evangelos Venizelos will try to form a government when he receives a three-day mandate from Greek President Karolos Papoulias today, after Alexis Tsipras of the anti-bailout Syriza party and Antonis Samaras of New Democracy failed. China Investment Corp. said that it has stopped buying European government debt because of the crisis on the continent.

Schaeuble’s Outlook

More than 50 percent of investors are predicting an exit from the 17-nation euro area this year, according to the Bloomberg Global Poll. “If Greece decides not to stay in the euro zone, we cannot force Greece,” German Finance Minister Wolfgang Schaeuble said yesterday.

Cash platinum, this year’s best-performing precious metal, rose for the first day in three, gaining as much as 0.6 percent to $1,509.38 an ounce. It was last at $1,506.50, after slumping to $1,490.75 yesterday, the lowest level since Jan. 16.

Spot palladium, this year’s worst-performing precious metal, snapped an eight-day losing streak, gaining as much as 0.9 percent to $619.25 an ounce. It tumbled to $609.75 yesterday, the lowest since Jan. 9, and was last at $616.25.

Silver rose as much as 0.5 percent to $29.36 an ounce, after retreating to $28.6375 yesterday, the lowest since Jan. 9. It was last at $29.315.

To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus