Gold futures rose for the first time in three days as mounting concern that European leaders won’t be able to agree on steps to stem the region’s debt crisis increased demand for a haven.
A German government official expressed pessimism over the outcome of a summit starting tomorrow aimed at resolving the crisis, and said the country rejects proposals to combine current and permanent euro-area rescue funds. European stocks fell, the Standard & Poor’s 500 Index lost 1.1 percent before rebounding, and the S&P GSCI commodities index dropped as much as 1.4 percent.
“There’s some concern about what will transpire in Europe,” Bill O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. “This is a case of gold’s role as an ultimate currency coming to bear.”
Gold futures for February delivery rose 0.8 percent to settle at $1,744.80 an ounce at 1:46 p.m. on the Comex in New York. The metal dropped 1.1 percent in the previous two days. The price has climbed 23 percent this year, partly because the Federal Reserve has kept its benchmark interest rate at a record low, fueling demand for the precious metal as an inflation hedge.
Silver futures for March delivery dropped 0.4 percent to $32.627 an ounce. Earlier, the price declined as much as 1.5 percent. The metal has climbed 5.5 percent this year.
© Copyright 2023 Bloomberg News. All rights reserved.