Tags: Gold | Climbs | Chinese | Bank | Loan | Concerns

Gold Climbs 2% on Chinese-Bank Loan Concerns

Tuesday, 05 Jul 2011 03:06 PM

Gold climbed the most in five weeks as a deteriorating credit outlook for China’s banks boosted demand for the precious metal as a store of value.

Moody’s Investors Service said Chinese bank loans to local governments are $540 billion more than the national auditor’s estimates. Shares of lenders fell on concern a drop in property prices may trigger defaults. Gold futures dropped 3.7 percent in the previous two weeks on Greece’s bailout.

“The crack in the armor out of China is keeping gold well bid,” said Adam Klopfenstein, a senior market strategist at Lind-Waldock, a broker in Chicago.

Gold for immediate delivery rose $16.10, or 1.1 percent, to $1,512.30 an ounce at 2:12 p.m. in New York. A close at that price would mark the biggest jump since May 27.

On the Comex in New York, gold futures for August delivery climbed $30.10, or 2 percent, to settle at $1,512.70 at 1:43 p.m. The exchange was closed yesterday for the Independence Day holiday.

Energy and grain prices rose, boosting the appeal of the metal as a hedge against inflation.

“There’s broad-based commodity optimism that’s spilling over to gold,” Klopfenstein said. “Higher commodity prices are inflationary.”

Silver futures for September delivery jumped $1.705, or 5.1 percent, to $35.41 an ounce on the Comex. The spot price was up $1.17, or 3.4 percent, to $35.33 after gaining 0.9 percent yesterday.

Platinum futures for October delivery increased $25.30, or 1.5 percent, to $1,742.10 an ounce on the New York Mercantile Exchange.

Palladium futures for September delivery gained $18.20, or 2.4 percent, to $775.65 an ounce on the Nymex.

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Gold climbed the most in five weeks as a deteriorating credit outlook for China s banks boosted demand for the precious metal as a store of value.Moody s Investors Service said Chinese bank loans to local governments are $540 billion more than the national auditor s...
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2011-06-05
Tuesday, 05 Jul 2011 03:06 PM
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