Gold topped $1,700 an ounce for the first time since March as speculation that the European Central Bank will announce unlimited purchases of government bonds to defuse the region’s debt crisis boosted the euro.
The euro traded near a two-month high against the dollar after two central bank officials said that ECB President Mario Draghi will announce the purchases at a policy-setting meeting today. The bond-buying program will be sterilized to assuage concerns about printing money, according to the two. Gold tends to trade inversely to the U.S. currency.
December-delivery gold gained as
much as 0.6 percent to $1,703.90 an ounce on the Comex in New York and
was at $1,703.80. The price has risen 8.7 percent this year.
Photographer: Ron D'Raine/Bloomberg
Spot gold rose 1 percent to $1,709.90 an ounce by 9:35 a.m. in London. The last time immediate-delivery bullion was above $1,700 an ounce was March 13. December-delivery gold gained 1.1 percent to $1,712.10 an ounce on the Comex in New York.
Gold will be at $1,840 an ounce by the end of 2012, Jeffrey Currie, head of commodities research at Goldman Sachs Group Inc., said in a Bloomberg Television interview today.
Policy makers’ stimulus is a “critical and direct driver of the outlook for gold,” Currie said. “In terms of the FOMC pursuing the QE3 it will be critical in putting more upward pressure on gold prices,” he said, referring to the U.S. Federal Open Market Committee and speculation about a third round of so-called quantitative easing, or asset purchases.
Assets in exchange-traded products expanded to a record 2,470.7 metric tons yesterday, data compiled by Bloomberg show. Bullion is up 9.3 percent this year.
‘Optimistic’ Market
“The market is optimistic about the ECB’s plan to rescue the region,” said Wang Xiaoli, chief investment strategist at CITICS Futures Co., a unit of China’s biggest listed brokerage. “Gold is getting a lift from the strength in the euro.”The ECB has been at the forefront of fighting the crisis, which has so far pushed five countries into bailouts and driven the 17-nation euro economy to the brink of recession. In July, Draghi said he would do “whatever it takes” to defend the euro.
Platinum for immediate delivery rose for a fifth day, climbing as much as 1.1 percent to $1,588.75 an ounce, the highest price since April 19, and was last at $1,583.25.
Investors are buying platinum at the fastest pace since 2010 after disruptions at mines in South Africa, the largest producer, caused the biggest loss of supply in at least seven years. Purchases through exchange-traded products were the most in 20 months in August, data compiled by Bloomberg show.
Spot silver gained as much as 2.3 percent to $32.995 an ounce, the highest level since April 3, before trading at $32.895. Palladium advanced 0.2 percent $646.25 an ounce.
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