Gold Reaches 3-Month High, Palladium Highest Since 2001
New York (July 10) Gold climbed to the highest in more than three months as Middle East tension spurred haven demand and after the dollar weakened following Federal Reserve minutes. Palladium reached a 13-year high after the longest run of gains since 2000.
Minutes of the Fed’s June meeting released yesterday showed some officials expressed concern investors may be complacent about the economic outlook. The minutes offered no new clues on the timing of an interest-rate increase even as policy makers agreed bond-buying would end in October. The dollar reached a one-week low versus a basket of 10 major currencies before trading little changed.
Gold rose 11 percent this year as the Fed pledged to keep interest rates low for a “considerable time” and amid tension in the Middle East and Ukraine. Israel has mobilized 20,000 soldiers for a possible ground invasion of the Gaza Strip, as militants there extended their rocket barrage and the Palestinian death toll increased.
“There was very little in them of any particular note,” David Govett, the head of precious metals at Marex Spectron Group in London, wrote today in a report, referring to the Fed minutes. “The dollar dropped slightly and the metals in turn strengthened. With the ongoing problems in the Middle East it seems that precious metals are going to stay bid for the time being.”
Gold for immediate delivery added 0.6 percent to $1,335.45 an ounce by 10:05 a.m. in London, according to Bloomberg generic pricing. It reached $1,337.81, the highest since March 21. Gold for August delivery rose 1 percent to $1,338 on the Comex in New York.
Trading Volume
Futures trading volume was 62 percent above the average for the past 100 days for this time of day, data compiled by Bloomberg show.
Holdings in gold-backed exchange-traded products are at the highest in two months, data compiled by Bloomberg show. Assets in platinum- and palladium-backed ETPs reached records this month.
Palladium for immediate delivery rose 0.1 percent to $874.50 an ounce in London, after reaching $875.61, the highest since February 2001. A 14th day of gains today would be the longest run of increases since June 2000.
The metal is heading for a third straight annual shortage amid rising demand for cars, where it’s mainly used in pollution-control devices alongside platinum. Supply has slowed after a five-month mining strike that ended last month in South Africa, the biggest producer of platinum and the second-largest for palladium.
Platinum gained 0.5 percent to $1,513 an ounce. Silver rose 1.2 percent to $21.3821 an ounce and earlier today reached $21.4145, the highest since March 17.
Source: Bloomberg
