Tags: Gold | Greece | Rescue | Metal

Gold Jumps Most in Two Weeks as Greece Rescue Spurs Metal Demand

Thursday, 08 March 2012 03:07 PM

Gold jumped the most in two weeks as the improved prospects for a debt swap in Greece sent the euro higher against the dollar, boosting the appeal of the precious metal as an alternative to the U.S. currency.

The euro strengthened the most against the dollar in two weeks as Greece moved closer to completing its debt swap. European Central Bank President Mario Draghi said inflation will probably breach the bank’s 2 percent limit this year even as the economy stalls. The ECB kept its benchmark interest rate at a record low of 1 percent. The MSCI All-Country World Index jumped as much as 1.5 percent

“It finally looks as if Greece will pull through, and the sentiment overall is positive,” Rick Trotman, a senior research analyst at MLV & Co. in New York, said in a telephone interview. “The risk-on mentality seems to be back for now.”

Gold futures for delivery in April rose 0.9 percent to settle at $1,698.70 an ounce at 1:42 p.m. on the Comex in New York. Prices advanced 0.7 percent yesterday.

Bullion assets in exchange-traded products expanded for a sixth straight session yesterday to a record 2,407.021 metric tons, now valued at about $131 billion, according to data compiled by Bloomberg.

The possibility of a third economic stimulus from the Federal Reserve is the key to determining gold’s next move, UBS AG said in an e-mailed report today.

Silver futures for May delivery increased 0.7 percent to $33.831 an ounce on the Comex. The commodity’s 21 percent gain this year is the biggest among precious metals.

On the New York Mercantile Exchange, palladium futures for June delivery advanced 2.1 percent to $699.45 an ounce. Platinum futures for April delivery climbed 1.8 percent to $1,656.70 an ounce.

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Thursday, 08 March 2012 03:07 PM
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