06 January 2015
Gold Set for Longest Rally in Three Months on Stock Rout, Greece
(Bloomberg) - Gold climbed for a third straight day to head for the longest run of gains since October as slumping equity markets and concern that Greece may quit the euro area spurred demand for a haven. Silver and palladium rose.
Bullion for immediate delivery advanced as much as 0.3 percent to $1,208.29 an ounce, the highest level since Dec. 30, and traded at $1,207.65 at 12:18 p.m. in Singapore, according to Bloomberg generic pricing. The metal, which fell last year, has rallied from a one-month low of $1,168.34 on Jan. 2.
Asian stocks extended a global rout today after oil slid below $50 a barrel for the first time since 2009. The euro traded near an almost nine-year low as campaigning began in Greece for a Jan. 25 election that Prime Minister Antonis Samaras said may lead to an exit from the 19-member region should the opposition Syriza party win. Assets in the SPDR Gold Trust expanded yesterday for the first time in two weeks, while U.S. coin sales jumped and trading volumes in China increased.
“Gold prices surged on fresh physical and investor buying,” James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note. The metal broke above $1,200, looking to equity markets for direction while ignoring the weaker euro and plunging oil prices, he wrote.
Gold priced in euros rose to the highest level since September 2013, after advancing 12 percent last year. European policy makers are focused on the fate of the country that triggered the region’s sovereign-debt crisis in 2009 at a time when the central bank moves closer to large-scale government-bond purchases to fight deflation and revive growth.
The U.S. Mint sold 42,000 ounces of gold coins yesterday compared with 18,000 ounces in all of December. In China, the largest consumer, volumes for the benchmark spot contract rose yesterday to the highest level in a week.
Gold for February delivery rose as much as 0.4 percent to $1,208.20 an ounce on the Comex, the highest price since Dec. 30, and was at $1,207.80. Net-long positions increased for the first week in three in the period ended Dec. 30.
Silver for immediate delivery advanced as much as 0.3 percent to $16.2428 an ounce and traded at $16.232, gaining for a third day. Spot platinum was at $1,214.75 an ounce from $1,212.69. Palladium rose 0.4 percent to $797.75 an ounce, after declining for six days in the longest slump since February.