Gold, holding below the highest price in almost four months in New York, headed for the longest run of weekly gains since August 2011 as concerns about Europe’s economy and the Middle East boosted haven demand.
Gold rallied as much as 1.7 percent yesterday after a company linked to Portugal’s second-largest bank missed debt payments, re-igniting concern about Europe’s sovereign-debt crisis. Banco Espirito Santo SA said today it has exposure of 1.18 billion euros ($1.6 billion) to companies of Grupo Espirito Santo. Israel called up 33,000 reserve soldiers, intensifying its response to Hamas rocket attacks from Gaza.
“Gold prices have opened pretty much flat,” Edward Meir, an analyst at INTL FCStone Inc. in New York, said in a note. Should bullion rise today, “this is going to attract even further technical interest, although we ourselves are not that inclined to jump in given that we do not think the Portuguese banking story will have much staying power and is significant enough to deliver a destabilizing jolt.”
Gold for August delivery traded at $1,337.10 an ounce by 8:39 a.m. on the Comex in New York on volumes that were 33 percent below the 100-day average for this time of the day, data compiled by Bloomberg show. The metal gained 1.3 percent this week, for a sixth straight gain.
Bullion gained 11 percent this year amid expectations that U.S. interest rates will remain low and as geopolitical tensions in the Middle East and Ukraine increased. Minutes of the U.S. Federal Reserve’s last meeting showed some officials were concerned investors may be complacent about the economic outlook. Israeli leaders want to stop a wave of rocket attacks on Israel from the Gaza Strip.
Bullion’s 14-day relative-strength index rose above the level of 70 yesterday for the first time in a week, suggesting to some investors who study charts that prices may reverse. The gauge was at 69.3 today.
Traders expect safe-haven appeal amid geopolitical tensions to lift gold prices next week, according to a Bloomberg survey.
Palladium for delivery in September fell 0.7 percent to $867.10 an ounce, set for a fourth weekly increase. The metal rose to as much as $877.75 yesterday, the highest since February 2001.
Platinum for October delivery fell 0.5 percent to $1,509.70 an ounce. The metal is still poised for a fourth weekly gain that’s the longest stretch since January.
Silver for September delivery was little changed at $21.495 an ounce after climbing to $21.63 yesterday, the highest price since March 17. The metal is heading for a sixth weekly advance.
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