Gold Advances to Record in New York, London After Jobs Data
Nov. 6 (Bloomberg) — Gold rose to a record in New York and London trading after a report showed U.S. employers cut more jobs than forecast in October, boosting demand for the metal as store of value.
Bullion is heading for a ninth consecutive annual gain and approaching $1,100 an ounce for the first time as investors seek to protect their wealth from the threat of inflation and the debasement of the U.S. currency. Payrolls fell by 190,000 workers last month, compared with a 175,000 drop anticipated by the median forecast of economists surveyed by Bloomberg News, figures from the Labor Department showed today.
“There’s massive investment demand for gold at the moment,” said Christoph Eibl, co-founder of Zug, Switzerland- based Tiberius Group, which manages $1.8 billion. “I see more liquidity pumped in to lift the economies from bad news.”
December gold futures climbed as much as $9.70, or 0.9 percent, to $1,099 an ounce on the New York Mercantile Exchange’s Comex division and were up 0.1 percent at $1,090.30 by 8:56 a.m. local time. Immediate-delivery bullion added as much as 0.8 percent to $1,098.50 in London and was last little changed at $1,090.05.
The metal advanced to $1,095 in the morning “fixing” in London, an all-time high, from $1,089 at yesterday’s afternoon fixing. Some mining companies use fixings to sell production.
Global Recovery
“We believe the rally in gold prices will continue,” Michael Lewis, an analyst at Deutsche Bank AG in London, said in a report today. “Further advances in the gold price will be based on fresh lows in the U.S. dollar, central bank buying of gold” and “increasing inflation volatility.”
Sri Lanka’s central bank, which has been purchasing gold for the last seven months, will continue buying the metal as a hedge against volatility in currency markets, Ajith Nivard Cabraal, the central bank’s governor said today. Cabraal, speaking in Colombo, declined to say how much had been bought.
Sri Lanka held 5.3 metric tons of gold as of September, according to World Gold Council data.
Seventeen of 23 traders, investors and analysts surveyed by Bloomberg, or 74 percent, said bullion will rise next week. Four forecast lower prices and two were neutral.
“We are rather concerned about the crowded nature of the gold market, for everyone, everywhere is long of gold and bearish of the U.S. dollar,” economist Dennis Gartman said in his Suffolk, Virginia-based Gartman Letter.
Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, declined to 1,108.34 tons as of yesterday from 1,108.40 tons on Nov. 4, figures on the company’s Web site showed.
Among other precious metals for immediate delivery in London, silver fell 0.3 percent to $17.355 an ounce. Platinum dropped 0.5 percent to $1,349.50 an ounce and palladium was little changed at $330.15 an ounce.
Bloomberg | Nicholas Larkin and Chanyaporn Chanjaroen | Fri, Nov 6, 2009
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