Gold rose, poised for a 10th straight annual gain, on demand for a haven from mounting sovereign debt. Silver headed for the biggest yearly advance since 1979.
Gold futures climbed to a record $1,432.50 an ounce on Dec. 7 amid Europe’s debt woes. The Federal Reserve kept U.S. borrowing costs low and purchased bonds to help revive the U.S. economy. Before today, silver jumped 81 percent this year.
“Gold has done so well this year because government activity indicates record deficits, low interest rates, and an obvious lack of fiscal discipline,” said Tom Winmill, who manages the Midas Fund in New York. “The U.S. monetary policy will lead to a devaluation in the dollar, and all eyes are focused on the next default in the European community.”
On the Comex in New York, gold futures for February delivery rose $12.70, or 0.9 percent, to $1,418.60 an ounce at 12:07 p.m. A close at that level would mark a record settlement price. Before today, the metal advanced 28 percent this year.
Gold priced in euros, British pounds, and Swiss francs rose to all-time highs this year as the European Union bailed out Greece and Ireland. Holdings in exchange-traded products backed by bullion are up 17 percent, and demand for gold coins surged.
“Gold’s rally will continue next year as inflation pressures continue to build and currencies remain weak,” said Li Ning, an analyst at China International Futures (Shanghai) Co. “The global economy is recovering, but we’re not completely out of the woods, and gold’s safe-haven status will increase investment demand.”
Silver futures for March delivery rose 37.7 cents, or 1.2 percent, to $30.89 an ounce. Earlier, the price reached $30.945, the highest since March 1980.
Among 19 raw materials in the Thomson Reuters/Jefferies CRB Index, only cotton has posted a bigger annual increase than silver. The gauge reflecting prices of energy, metals and crops has topped gains in stocks, bonds and the dollar.
“Commodities will do well along with other risk-asset classes,” said Aaron Gurwitz, the chief investment officer at Barclays Wealth in New York, which manages about $250 billion. “The fastest-growing economies are very commodity-intensive. Commodities will be under upward price pressure. We like stuff that is used to make things or feed people, like copper, oil and soybeans.”
Silver futures reached a record $50.35 in 1980, a year after the Hunt brothers tried to corner the market.
Palladium futures for March delivery rose $13.50, or 1.7 percent, to $799.70 an ounce on the New York Mercantile Exchange. Earlier, the price reached $800.80, the highest since March 2001. Before today, the commodity surged 92 percent this year. The commodity isn’t a CRB component.
Platinum futures for April delivery rose $20.20, or 1.2 percent, to $1,769.50 an ounce. Before today, the metal gained 19 percent this year.
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