Wednesday 13 December 2017

Gold advances to record

Gold advanced to a record in London as concern that some European governments may struggle to raise funds boosted demand for a protection of wealth. Silver reached a 30-year high of more than $28 an ounce.

The euro weakened against the dollar on concern debt-stricken nations will struggle to repay bondholders and spending cuts will stifle growth in the region.

The greenback fell to a nine-month low last week as the Federal Reserve said it will purchase more debt. Gold usually moves inversely to the dollar.

“Support will come from the Fed’s decision to implement quantitative easing, increasing sovereign debt woes” and technical price momentum, Tom Pawlicki, an analyst at MF Global Holdings Ltd in Chicago, said in a report.

“The potential that the dollar maintains its upside rebound” and the end of an Indian religious festival may pressure gold prices, he said.

Immediate-delivery bullion added $3.51, or 0.2pc, to $1,413.06 an ounce at 9:42am in London after reaching $1,414.85.

The metal for December delivery was 0.7pc higher at $1,412.60 on the Comex in New York, after reaching a record $1,414.60.

Gold is up 29pc this year and is heading for a 10th annual gain, the longest winning streak since at least 1920 in London, partly on demand for an alternative asset to protect against the debasement of currencies.

The Fed last week said it will buy an additional $600bn of Treasuries through June to spur growth.

Currency concerns

European Union Economic and Monetary Affairs Commissioner Olli Rehn is in Dublin today to examine the Government’s budget after it laid out a plan last week to cut spending and raise taxes by as much as €6bn in 2011.

Concern that Greece may go bankrupt earlier this year helped gold advance to a then-record.

“Money is heading toward gold because the euro is falling and the dollar is poised to fall,” said Chris Yoo, head of global derivatives at Samsung Futures Inc in Seoul.

Gold climbed to the highest level priced in euros and Swiss francs since June 28, and the highest price in British pounds since at least January 2000, data compiled by Bloomberg show.

Gold assets in exchange-traded products added 4.33 metric tons to 2,090.18 tons yesterday, according to data compiled by Bloomberg from 10 providers.

Holdings increased for the first time in 15 days on November 4 and reached a record 2,104.65 tons on October 14. Silver assets gained 39.9 tons to 14,269 tons, data from four providers show.

Silver’s 30-year high

Silver for immediate delivery in London earlier today reached $28.195 an ounce, the highest price since March 1980, and was last up 1.2pc at $28.09.

Prices are up 66pc this year. Silver reached an all-time high of $50.35 in New York in 1980, a year after the Hunt brothers tried to corner the market.

An ounce of gold bought as little as 50.1313 ounces of silver in London today, the smallest amount since March 2008.

Palladium was 1.3pc higher at $718 an ounce, after reaching $718.88, the highest price since April 2001. It’s up 76pc this year.

Platinum added 0.4pc to $1,780.43 an ounce. Prices reached $1,797.50 on November 4, the highest level since July 2008. Both metals are used mostly to make jewelry and pollution-control devices for cars.

Bloomberg

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