Gold Rises on Demand for Haven Asset Amid Greek Debt Concern

Gold rose for the day on concern that Greece may default on its debts which boosted the appeal of precious metals as a safe haven asset. Uncertainty continues to dominate the country and gold continues to benefit off of the uncertainty.

By Pham-Duy Nguyen
Jun 21, 2011 11:06 AM MT
BLOOMBERG

Gold rose for the sixth straight session as concern that Greece may default on its debts boosted the appeal of the metal as an investment haven.

Greek Prime Minister George Papandreou’s government faces a confidence vote today that may determine whether the country becomes the first euro-area nation to default.

“Gold may continue to be the beneficiary of events in Greece, where uncertainty will continue to dominate,” said Tom Pawlicki, an analyst at MF Global Holdings Ltd. in Chicago.

Gold futures for August delivery rose $4.40, or 0.3 percent, to settle at $1,546.40 an ounce on the Comex in New York. The price has climbed 2 percent in the six sessions through today, the longest rally since April.

The precious metal touched a record $1,577.40 on May 2 as escalating sovereign-debt woes and record-low U.S. borrowing costs increased the appeal of bullion as an alternative to currencies. Gold denominated in euros reached an all-time high on May 25.

“We remain bullish of gold in non-U.S. dollar terms,” said Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter.

Silver futures for July delivery rose 30.8 cents, or 0.9 percent, to $36.379 an ounce on the Comex.

Platinum futures for July delivery climbed $16.70, or 1 percent, to $1,747.20 an ounce on the New York Mercantile Exchange.

Palladium futures for September delivery rose $19.05, or 2.5 percent, to $767.25 an ounce on the Nymex.

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

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