Gold Nears Bull-Market Territory as Syrian Tensions Spur Demand

Wednesday, 28 Aug 2013 07:27 AM

 

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Gold climbed to a three-month high in London, heading for a bull market, as speculation about an attack against Syria within days spurred demand for precious metals as a haven. Silver rose to four-month high.

Any armed response would be focused on Syria’s weapons capabilities and wouldn’t be aimed at deposing President Bashar al-Assad, U.S. and U.K. officials said. U.K. Prime Minister David Cameron said in London that while no decision has been made on a course of action, it would be legal and proportionate.

Surging demand for jewelry, coins and bars in Asia helped prices rally 19 percent since the end of June. Bullion is set for the first annual drop in 13 years after some investors lost faith in the metal as a store of value, spurring at least $26 billion of writedowns in the mining industry and losses for John Paulson, the billionaire hedge fund manager.

“We are seeing safe haven buying across the board,” said Bernard Sin, head of currency and metal trading at bullion refiner MKS (Switzerland) SA in Geneva. “Geopolitical uncertainty triggered this buying interest.”

Gold for immediate delivery climbed as much as 1.3 percent to $1,433.83 an ounce, the highest since May 14, and was at $1,427.03 by 9:40 a.m. in London. A close at $1,440.78 would leave the market up 20 percent from the 34-month low on June 27, meeting the common definition of a bull market.

Record High

The futures for December delivery gained 0.4 percent to $1,425.20 an ounce on the Comex in New York. They would need to close at $1,453.92 an ounce to be in a bull market. Trading on Comex was about even with the average in the past 100 days for this time of day, data compiled by Bloomberg show. Gold traded in Indian rupees advanced to a record as the currency sank to an all-time low.

Assets in the SPDR Gold Trust reached the highest since Aug. 1, gaining 0.1 percent to 921.03 metric tons, according to the fund’s website. Holdings rose for a second week in the five days to Aug. 23.

Silver for immediate delivery climbed as much as 2.6 percent to $25.1046 an ounce, the highest since April 15. Platinum advanced 0.5 percent to $1,533.71 an ounce and palladium rose 0.3 percent to $746.05 an ounce.


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