Gold, silver rise on demand for haven amid Europe’s sovereign-debt woes

Gold and silver futures rose for the second straight day on concern thatEurope’s sovereign-debt crisis will hamper the global economy, bolstering demand for the precious metals as a store of value.

“Downside risks” to Europe’s economy have intensified, European Central Bank President Jean-Claude Trichet said. The ECB will resume covered-bond purchases and reintroduce yearlong loans for banks. U.S. Treasury Secretary Timothy F. Geithner said that Europe has been moving “too slowly” in dealing with the crisis. Before today, gold climbed 15 percent this year.

“We have become very sensitive to everything we hear out of Europe,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “ Physical demand is providing support to gold.”

Gold futures for December delivery gained $6.10, or 0.4 percent, to $1,647.70 an ounce at 10:39 a.m. on the Comex in New York. Yesterday, the metal climbed 1.6 percent.

“Toward the end of the year, we certainly see firmer prices,” David Baker, a managing partner at Baker Steel Capital Managers LLP, said in a Bloomberg Television interview. “Whether we’ll get to $2,000, we’ll see.”

On Sept. 6, gold reached a record $1,923.70.

Silver futures for December delivery climbed $1.063, or 3.5 percent, to $31.415 an ounce. Yesterday, the metal gained 1.7 percent. Before today, the price gained 33 percent in the past 12 months. – Bloomberg

Posted by VBN on Oct 7 2011. Filed under Gold. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry