Gold May Gain in New York on Speculation About Increased Physical Buying
posted on
Jul 26, 2010 12:41PM
Gold, little changed in New York today, may gain on speculation physical demand for the metal will increase. Futures were little changed week last week and are trading 6.4 percent below a record set last month. Most European banks passed stress tests designed to show their ability to withstand a financial crisis, lenders and regulators said July 23. “Physical demand is supporting the market,” said Afshin Nabavi, a senior vice president at bullion refiner MKS Finance SA in Geneva. “In the past two weeks, every time there’s an attempt back toward the $1,185 level, there is good demand coming. The investment side has been relative quiet.” Gold futures for August delivery lost $2.10, or 0.2 percent, to $1,185.70 an ounce at 8:17 a.m. on the Comex in New York. Prices declined 40 cents last week. Gold for immediate delivery in London was 0.2 percent lower at $1,186.50. Bullion fell to $1,189 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,190.50 at the afternoon fixing on July 23. Futures are up 8.3 percent this year and set a record $1,266.50 an ounce on June 21 as investors sought to protect their wealth against the European debt crisis and on concern that the global economy may slow. European regulators found that seven of the 91 banks subject to evaluations need to raise a combined 3.5 billion euros ($4.5 billion) of capital. ETF Holdings Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were unchanged at 1,302.05 metric tons on July 23, according to the company’s website. Global holdings of the metal by ETFs were little changed at 2,064.4 tons on that date, according toBloomberg data from 10 providers. “There is physical buying coming in, as prices are below $1,200,” said Chae Un Soo, a Seoul-based trader with KEB Futures Co. “In the longer term, gold has the potential to power higher again, as signs of an economic rebound are likely to provide an excuse for investors to build up positions as an inflation hedge.” Silver for September delivery in New York fell 0.4 percent to $18.035 an ounce. Platinum for October delivery gained 0.3 percent to $1,548 an ounce. Palladium for September delivery was 1.3 percent higher at $473 an ounce. Impala Platinum Holdings Ltd., the world’s second-largest producer of the metal, faces a strike by more than 18,000 workers after talks to resolve a pay dispute failed, South Africa’s National Union of Mineworkers said. Members will vote tomorrow on whether to strike, the union’s spokesman Lesiba Seshoka said by phone today. To contact the reporters on this story: Nicholas Larkin in London atnlarkin1@bloomberg.net;Kyoungwha Kim in Singapore at kkim19@bloomberg.net Source: http://www.bloomberg.com/news/2010-07-26/gold-climbs-on-speculation-that-prices-of-less-than-1-200-spurring-demand.html