Bloomberg News

Gold Gains for Third Day as Europe Concern Boosts Haven Appeal

March 11, 2013

Gold gained for the third straight session, the longest rally this year, on concern that the European crisis may worsen, increasing the appeal of the precious metal as a haven.

Fitch Ratings cut Italy’s credit rating by one level on March 8. Physical demand prospects out of China remain positive in the weeks ahead, UBS AG said in a report on March 8. Gold is down 5.8 percent this year, after 12 straight annual gains, on mounting confidence that economies are recovering.

“Fitch downgrading Italy is providing some support,” Fain Shaffer, the president of Infinity Trading Corp. in Medford, Oregon, said in a telephone interview. “Also, there is an increase in demand in Asia.”

Gold futures for April delivery climbed 0.1 percent to settle at $1,578 an ounce at 1:49 p.m. on the Comex in New York. The metal fell as much as 0.2 percent today as the Dow Jones Industrial Average reached an all-time high on signs that the U.S. economy is strengthening.

“The positive data out of the U.S. is very negative for gold, and gold has been getting slaughtered because of equities this year,” Shaffer said.

U.S. payrolls rose and the jobless rate declined in February, the Labor Department said March 8. Holdings in bullion-backed exchange-traded funds fell to 2,484.1 metric tons on March 8, the lowest since September, data compiled by Bloomberg show.

Silver futures for May delivery slid 0.3 percent to $28.853 an ounce on the Comex, the first decline this month. Trading volume was 55 percent below the average in the past 100 days for this time of day.

On the New York Mercantile Exchange, platinum futures for April delivery fell 0.2 percent to $1,601.20 an ounce.

Palladium futures for June delivery retreated 0.5 percent to $779.20 an ounce. On March 8, the metal climbed to $788.45, the highest since September 2011.

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