Gold Climbs to Record as Platinum Reaches Three-Year High on Haven Demand

Gold rallied for a sixth day to an all-time high as a global economic slowdown and the European debt crisis boosted demand for a haven. Platinum climbed to the highest level in more than three years.

Immediate-delivery bullion gained as much as 1.5 percent to $1,879.05 an ounce and traded at $1,869.95 at 11:09 a.m. Singapore time. The metal is up 16 percent in August, heading for its best monthly performance since September 1999.

December-delivery gold rose as much as 1.6 percent to a record $1,881.90 an ounce. Bullion priced in sterling advanced to an all-time high, while June-delivery gold on the Tokyo Commodity Exchange and December-delivery metal on the Shanghai Futures Exchange climbed to their highest ever. 

Haven Assets 

“You have a look at some of the other safe-haven assets that investors were looking at, the Swiss franc and Japanese yen,” David Lennox, a resource analyst at Fat Prophets, said from Sydney today. “Authorities there have taken steps to try and curb the rise in those particular currencies. That’s probably pushed more investors into gold.” The franc and the yen weakened today.

The metal’s relative strength index has topped 70 since Aug. 5, a signal to some investors who study technical charts that the metal may be overbought and set to decline. Exchange-traded product holdings fell for the first time in five days on Aug. 19 to 2,211.095 metric tons after reaching a record 2,216.756 tons on Aug. 8, Bloomberg data show. Hedge funds and other money managers trimmed their net-long gold positions by 2 percent to 200,086 contracts in the week to Aug. 16, data from the U.S. Commodity Futures Trading Commission showed.

“A sharp correction would be triggered by a quick resolution or a clear direction of policy on the fiscal side to help the market, which I don’t think would happen anytime soon,” Friesen said from Hong Kong. “Conditions still remain bullish.”

Silver Advances 

Spot silver climbed to the highest in more than three months, gaining as much as 2.5 percent to $43.975 an ounce. December-delivery silver surged 3.6 percent to $44.01, also the highest since May 3. Holdings in exchange-traded products increased for a third day on Aug. 19 to 447.5 million ounces.

“Once the market becomes comfortable with where they see the gold price and the gold price trend becoming a norm, then they start to look at silver,” said Lennox.

The ratio of gold to silver fell to a two-week low as investors sought to protect their wealth in the metal that may also benefit from economic growth. One ounce of gold bought as few as 42.5917 ounces of silver today.
Cash platinum advanced as much as 0.9 percent to $1,891.50 an ounce, the highest price since July 2008, and traded at $1,886. Palladium was little changed at $752 an ounce.(Bloomberg)