 Gold `Within a Stone's Throw' of Record as Equities Slump, Euro Declines
Bloomberg - 9/8/2010 10:02:24 AM
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Gold traded near a record as a drop in equities increased the appeal of the precious metal as an alternative investment. Silver gained to near the highest level since March 2008.
Immediate-delivery bullion gained as much as 0.2 percent to $1,257.45 an ounce and was at $1,256.55 by 10:43 a.m. in Tokyo. The price touched $1,259.80 yesterday, close to a record $1,265.30 reached June 21.
Bullion has jumped 15 percent this year and is set for a 10th annual gain as investors seek protection against financial turmoil in Europe and the prospect of slowing economic growth.
“It’s within a stone’s throw of the June record” as equities dropped and the euro fell, boosting demand for gold, Shuji Sugata, a research manager at Mitsubishi Corp. Futures Ltd. in Tokyo, said today by phone. Bullion prices were also supported by a Wall Street Journal report that stoked concern over European economic growth, he said.
U.S. stocks fell yesterday for the first time in five days, ending the longest streak of gains for the Standard & Poor’s 500 Index since July, on concern that the European debt crisis may worsen, hampering global growth.
European stress tests on lenders understated some banks’ holdings of potentially risky debt, according to a Wall Street Journal report. The euro tumbled yesterday as an industry group said Germany’s 10 largest banks may need fresh capital to meet new regulations.
The euro was at $1.2697 against the dollar after losing 1.5 percent yesterday to $1.2682.
Holdings Gain
Gold holdings in 10 exchange-traded products tracked by Bloomberg rose 0.2 percent yesterday, close to a record set on Sept. 1. Gold ETFs are backed by the metal and trade like shares, allowing investors to hold the commodity without taking physical delivery.
Gold for December delivery was little changed at $1,258 an ounce on the Comex in New York after settling at a record $1,259.30 yesterday.
Silver for immediate delivery rose 0.6 percent to $19.9012 an ounce after touching $20.015 yesterday, the highest level since March 2008. Platinum declined 0.2 percent to $1,552.75 an ounce, falling for a second day, while palladium climbed 0.2 percent to $522.25 an ounce, the first gain in three days.
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