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Thursday, May 20, 2010
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Bloomberg.com
May 20 (Bloomberg) -- Gold gained, rebounding from the steepest loss in more than three months, on speculation that Europe’s fiscal turbulence will continue to fan investor demand for safer assets.
Gold for immediate delivery strengthened as much as 0.4 percent $1,198.15 an ounce and traded at $1,196.25 at 8:57 a.m. in Singapore. The metal slumped 2.6 percent yesterday, the most since Feb. 4. June futures in New York rose 0.3 percent to $1,196.60 an ounce.
“I’m bullish” on gold, said Ben Westmore, Melbourne-based commodities economist with National Australia Bank. “We are expecting further investment inflows to gold, as euro concerns linger,” he said today.
The euro fell against the dollar on concern that the pace of Europe’s economic recovery will slow as governments take measures to cut spending amid the region’s debt crisis. German Chancellor Angela Merkel and Finance Minister Wolfgang Schaeuble will host talks on financial regulation today in Berlin before a Group of 20 summit next month in Canada.
Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, increased 3.04 metric tons to a record 1,220.15 tons yesterday, according to figures on the company’s website. Gold has gained about 9 percent this year, and is heading for its 10th annual gain, the longest winning streak since at least 1920.
“The mega trend is still up but the market needs to go through some minor correction,” said Wallace Ng, executive director with Fortis Nederland NV in Hong Kong. “We will see more profit-taking on recent gains but the $1,190 level seems to be supported.”
Gold prices will likely rise further as investors, concerned that European monetary expansion will spur inflation, seek a haven, Aram Shishmanian, chief executive officer of the producer-funded World Gold Council, said yesterday.
Gold will also climb as supply fails to meet growing demand from exchange-traded funds and the jewelry and nanotechnology industries, Shishmanian said in an interview in Lima, Peru.