Gold climbed for the first time in six sessions in London as stock markets tumbled on speculation that economies are worsening, adding to the metal’s appeal as a store of value.
European and Asian equities dropped and US stock-index futures fell after billionaire investor Warren Buffett said the American economy is in “shambles” and concern increased that financial companies will need more capital. Gold lost 5.1 percent last week, the most since early December, after rallying to an 11-month high of US$1,006.29 an ounce on February 20.
“Deepening fears surrounding the global economic picture have lifted gold,” said James Moore, an analyst at TheBullionDesk.com in London. The metal will likely trade between $930 an ounce and $970 an ounce in the “short term” before climbing to a record on concern economies may deteriorate, he said.
Bullion for immediate delivery rose as much as $16.16, or 1.7 percent, to $958.51 an ounce and traded at $950.43 at 11:02 a.m. local time. April futures gained $9.50, or 1 percent, to $952 an ounce in electronic trading on the New York Mercantile Exchange’s Comex division.
In Vietnam, the precious metal jumped on the back of the international rally. Gold price at the Saigon Jewelry Joint Stock Co., the country’s largest gold trader, surged VND250,000 to VND19.8 million ($1,132) a tael, or $944 per ounce. A tael is equal to 1.2 ounces.
Gold, which reached a record $1,032.70 an ounce a year ago, is up 7.9 percent this year. The MSCI World Index has slid 20 percent, with Citigroup Inc., Swiss Reinsurance Co. and other financial companies accounting for most of the 10 biggest drops.
Troubles ahead
“Despite the correction many analysts consider the upside momentum still intact given there’s no end in sight for troubles in the financial sector,” London-based broker ODL Securities Ltd. said today in a report.
Spot prices may rebound this week as investors seek a haven, according to 20 of 31 traders, investors and analysts surveyed from Tokyo to Chicago last week. Seven respondents advised selling and four were neutral. Still, hedge-fund managers and other large speculators decreased their net-long position, or bet prices will rise, by 2 percent in New York gold futures in the week ended February 24, according to US Commodity Futures Trading Commission data.
Gold imports by India, the world’s biggest consumer, fell for the fourth straight month to almost nil in February, according to provisional estimates from the Bombay Bullion Association Ltd.
Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, held at a record 1,029.29 metric tons as of February 27. Holdings in the fund have increased 32 percent since the start of the year as investors sought a store of value.
Source : thanhniennews.com