Gold rose today on demand for a safe haven against the European debt crisis that is hindering the entire global economy. Italy's credit rating was cut yesterday and Europe is having debt concerns. People are buying up gold again in fear of a global financial crisis.
By Debarati Roy and Nicholas Larkin
October 05, 2011, 3:11 PM EDT
Oct. 5 (Bloomberg) -- Gold futures rose for the third time in four sessions on demand for a haven amid persistent concerns that Europe’s debt crisis will hinder the global economy.
Yesterday, Italy’s credit rating was cut for the first time in almost two decades by Moody’s Investors Service, which said that other euro-area nations ranked below the top Aaa level may have their grades lowered amid contagion from the region’s budget woes. Wheat and corn led a rally in raw materials on signs the U.S. may take more step to bolster a recovery.
“People are buying gold as proxy for fear,” Adam Klopfenstein, a senior market strategist at MF Global Holdings Inc. in Chicago, said in a telephone interview. “Also, the strength in the commodities pack is helping gold.”
Gold futures for December delivery gained $25.60, or 1.6 percent, to settle at $1,641.60 an ounce at 1:42 p.m. on the Comex in New York. Earlier, the metal fell as much as 1.2 percent.
“Physical demand has been reinvigorated at these price levels,” Suki Cooper, an analyst at Barclays Capital in New York, said in a report.
Futures reached a record $1,923.70 on Sept. 6 as investors sought alternatives to equities and some currencies. The metal has climbed 15 percent this year. Spot gold is in the 11th year of a bull market, the longest rally since at least 1920.
Silver futures for December delivery rose 51.3 cents, or 1.7 percent, to $30.352 an ounce on the Comex. Earlier, the metal tumbled as much as 4.7 percent.
On the New York Mercantile Exchange, platinum futures for January delivery gained $14.30, or 1 percent, to $1,482.90 an ounce, ending a five-session slump, the longest since June.
Palladium futures for December delivery climbed $6.20, or 1.1 percent, to $570.35 an ounce.
--With assistance from Chiara Vasarri in Rome. Editors: Patrick McKiernan, Daniel Enoch
To contact the reporters for this story: Debarati Roy in New York at email@example.com; Nicholas Larkin in London at firstname.lastname@example.org
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