Gold on the rise as investors seek safe haven
21 Dec 2010
Gold advanced for the third day as European sovereign-debt concerns increased demand for the precious metal as an investment haven, with holdings in exchange-traded products climbing to an all-time high.
Immediate-delivery bullion rose 0.2 per cent to $1,387.28 an ounce at 1.12 pm in Melbourne. The price gained as much as 0.9 per cent on Monday after dropping 0.8 per cent last week. The February-delivery contract was little changed at $1,388 an ounce on the Comex in New York.
"The market is finding a reason to look to gold at the moment, but it is clearly not pushing too high," said Darren Heathcote, head of trading at Investec Bank (Australia) Ltd. "People are finding it very difficult to sell gold while the ETF balances are strong and they are continuing to rise."
Gold assets in exchange-traded products, or ETPs, reached a record 2,114.6 metric tons as of Monday, according to data collected by Bloomberg from 10 providers. Holdings have gained 18 per cent this year.
Chinese vice premier Wang Qishan pledged "concrete action" to help the European Union with its debt problems at an EU-China summit in Beijing today. Moody's Investors Service lowered Ireland's credit rating by five levels to Baa1 on 17December 17, the day after it placed Greece on review for a possible downgrade.
The euro rose to $1.3167 as of 10.21 am in Tokyo after dropping on Monday to a two-week low against the dollar on speculation that some European nations and banks will struggle to raise funds amid the region's debt crisis.
