Gold advanced for the first time in five days in New York, trimming the biggest weekly loss in more than six months, as Europe’s worsening debt crisis spurs demand for the metal as a hedge.
German business confidence fell to a two-year low in June, data today showed, while Spain’s 10-year borrowing costs rose above the 7 percent level this week for the first time in 15 years. Gold erased its gains for the year yesterday after the Federal Reserve on June 20 cut its forecast for 2012 U.S. growth and extended Operation Twist, an economic stimulus plan to buy longer-maturing debt. The central bank refrained from additional bond purchases.
“Now that the Fed meeting is out of the way and the stimulus premium is gone, we are seeing people come back to gold at current levels,” James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview. “Gold is getting some safe-haven bids today.”
Gold futures for August delivery rose 0.1 percent to settle at $1,566.90 an ounce at 1:38 p.m. on the Comex in New York. Still, prices slipped 3.8 percent this week mainly because of a 3.1 percent slump yesterday and as commodities entered a bear market.
“Gold does not do well in a deflationary environment,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview.
Silver futures for September delivery fell 0.7 percent to $26.724 an ounce, after earlier slipping to $26.57, the lowest since Dec. 29. The metal retreated 7 percent this week.
On the New York Mercantile Exchange, platinum futures for July delivery slid 0.5 percent to $1,431.20 an ounce, declining for the sixth straight session, the longest since May 14. Palladium futures for September delivery slipped 0.2 percent to $607.20 an ounce, extending the weekly loss to 3.7 percent.
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