Gold Advances
(Bloomberg) — Gold advanced on rising demand for the precious metal as a hedge against inflation after U.S. housing starts increased in June, adding to signs the world’s biggest economy is stabilizing. Silver also gained.
Home-building starts rose 3.6 percent to an annual rate of 582,000, the highest since November, the Commerce Department said today in Washington. Building permits, a sign of future construction, jumped the most in a year. Crude-oil futures, used by some investors as an inflation indicator, advanced. Some investors use gold as a store of value.
“Fresh buying will be supported by a weakening dollar and a build in inflation expectations,” Suki Cooper, a Barclays Capital analyst in London, said today in a report.
Gold futures for August delivery gained $1.90, or 0.2 percent, to $937.30 an ounce at 11:27 a.m. on the New York Mercantile Exchange’s Comex division.
Bullion for immediate delivery in London advanced 57 cents to $937.91 an ounce.
Silver futures for September delivery increased 16.5 cents, or 1.2 percent to $13.40 an ounce in New York.
Gold “will continue to look to both the dollar and broader market movement for direction,” James Moore, an analyst at TheBullionDesk.com in London, said today in a note.
The metal rose to $937.50 in the London afternoon “fixing,” the price used by some mining companies to sell their output, from $934.50 in the morning fixing.
Dollar Index
The U.S. Dollar Index, a six-currency gauge of the greenback’s value, was headed for a loss of almost 1 percent for the week. Gold, which tends to rise when the dollar falls, is closing on a 2.7 percent gain this week after two straight drops.
Crude-oil futures climbed as much as 2.7 percent in New York, topping $63 a barrel. Oil is headed for a weekly increase of more than 5 percent.
“We expect markets to become thinner and more volatile” in the next several weeks, Moore said. He predicted gold will trade between $905 and $950 an ounce.
Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, rose 0.3 metric ton to 1,094.85 tons as of yesterday, the company’s Web site showed. That’s the first increase since the fund reached a record 1,134.03 tons almost seven weeks ago.
Categorised as: Gold News