Gold, little changed near a two- month high in London, may gain on speculation that an economic slowdown will increase demand for the precious metal as a protection of wealth.
U.S. employment probably cooled in August, economists expect a report to show today. Gold is heading for a fifth weekly advance and is trading 1 percent below a record. Global gold holdings in exchange-traded products yesterday fell for the first time since Aug. 24.
“The market is still very concerned about the U.S. economy,” said Bernard Sin, the head of currency and metal trading at bullion-refiner MKS Finance SA in Geneva. “There could be some gradual profit-taking, but any sell-off would be an opportunity to buy back” into the market, he said.
Immediate-delivery bullion added $1.78, or 0.1 percent, to $1,252.72 an ounce at 11:36 a.m. in London. Prices are up 1.2 percent this week and reached a two-month high of $1,254.73 an ounce on Sept. 1. Gold for December delivery was little changed at $1,254.40 on the Comex in New York.
The metal rose to $1,252 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,248.50 at yesterday’s afternoon fixing. A fifth weekly gain would be the longest winning streak since September last year.
Bullion has climbed 14 percent this year, reaching a record $1,265.30 on June 21. The price is set for a 10th annual gain as investors seek to protect their wealth against financial turmoil in Europe and the prospect of slowing economic growth. Thirteen of 18 traders, investors and analysts surveyed by Bloomberg, or 72 percent, said the metal will gain next week. Three forecast lower prices, and two expected little change.
U.S. Jobs Data
U.S. employers eliminated 105,000 positions in August, according to the median estimate of economists in a Bloomberg News survey. The unemployment rate rose to 9.6 percent last month from 9.5 percent in July, economists expect the Labor Department report due at 8:30 a.m. New York time to show.
“Concern over a slowdown in the global economy is still prevailing,” Shuji Sugata, a research manager at Mitsubishi Corp. Futures Ltd. in Tokyo, said today by phone. “Today’s U.S. jobs data may set the direction for equities and currencies as well as gold.”
Global holdings of the metal by ETPs slipped 8.89 metric tons to 2,072.49 tons yesterday, according to Bloomberg data from 10 providers. Holdings reached a record 2,081.38 tons on Sept. 1. Assets in the SPDR Gold Trust, the biggest product backed by bullion, yesterday fell 9.12 tons to 1,294.91 tons, figures on the company’s website showed.
Roubini on Gold
The dollar, yen and Swiss franc may be better investments than gold if the world economy slips back into recession, said Nouriel Roubini, the New York University economist who predicted the global financial crisis.
“If there was a double-dip recession, increasing risk aversion, some assets are going to be preferred, and gold will be one of them,” Roubini said today in an interview on Bloomberg Television’s “On The Move” with Francine Lacqua. “But in that situation, things like the dollar, the yen, the Swiss franc have more upside in a situation of rising risk aversion because they are much more liquid.”
Silver for immediate delivery in London added as much as 0.2 percent to $19.685 an ounce, the highest price since May 14, and was last little changed at $19.6525. Platinum gained as much as 0.9 percent to $1,564.75, the highest price since Aug. 9, and was last at $1,562.05. Palladium rose 1.3 percent to $529.75 an ounce. Prices earlier reached $530.25, the highest level since May 14.
Silver held in ETF Securities Ltd.’s European and Australian exchange-traded products rose 0.7 percent to a record 30.28 million ounces yesterday, according to the company’s website.
