Gold Posts Biggest Weekly Rally Since August on Haven Demand

New York (Feb 14)  Gold posted the biggest weekly gain since August as signs of a faltering recovery in the U.S. economy boosted demand for precious metals as a haven. Silver had the longest rally since March 2008.

U.S. factory production unexpectedly declined in January by the most since May 2009, figures from the Federal Reserve showed. Gold rose for the eighth straight session, extending the longest rally since July 2011. The price closed above the 200-day moving average for the first time in a year.

Gold has jumped 9.7 percent this year. In 2013, the price plunged 28 percent, the most since 1981, as billionaires John Paulson and George Soros sold holdings, while other investors lost faith in the metal as a store of value amid a U.S. equity rally to a record and tame inflation. Fed Chairman Janet Yellen said on Feb. 11 that the recovery in the labor market is “far from complete.”

“Gold has broken the downtrend, and we are going to see some buying come in,” Lance Roberts, who oversees $600 million as chief executive officer of STA Wealth in Houston, said in a telephone interview. “Yellen and the Fed will definitely not take away the stimulus since it is becoming increasingly clear that the economy is not healthy.”

Gold futures for April delivery rose 1.4 percent to settle at $1,318.60 an ounce at 1:42 p.m. on the Comex in New York. This week, the price climbed 4.4 percent, the most since Aug. 16.

(Source:  Bloomberg)