Gold for December delivery added $3.10, or 0.3%, to $1,231.40 an ounce on the Comex division of the New York Mercantile Exchange. Gold’s fortunes changed about one hour before the end of trading, as prices had opened lower on profit-taking. Gold remains a global growth story. We’re seeing flight-to-quality trading going on and people coming back to gold.I anticipate the shiny metal to hit new highs in the next couple of weeks. Gold reached a record on June 18, when it settled at $1,258.30 an ounce. Any news about a global slowdown or economic snags in the U.S., Europe or China should provide the needed catalyst. Earlier, the stronger dollar had applied some pressure on gold prices. The dollar index (DXY 82.48, +0.26, +0.32%) , which compares the U.S. currency to a basket of six other currencies, recently declined 0.1% to 82.17, taking that pressure off.
Gold ended Tuesday’s floor session up $2.10, or 0.2%, to $1,228.3 an ounce, the highest settlement for a most-active contract since late June.
Gold buyers have taken notice of the recent leg up, as evidenced in recent activity for the top exchange-traded fund backed by gold, SPDR Gold Trust (GLD 120.19, -0.03, -0.03%) . The fund reported holdings of 1,294 metric tons on Tuesday, the latest day for which statistics were available, compared to holdings of 1,286 metric tons earlier this week. It was the first rise in holdings since Aug. 12 and puts the fund back at levels seen at the end of July. The fund reported record holdings of 1,320 metric tons in late June.
The Soros Fund Management, of star investor George Soros, “has been among the gold buyers of past months and has virtually doubled its portfolio share of the SPDR Gold Trust to 13% in the past quarter. Earlier this week, New York hedge fund Eton Park Capital Management LP disclosed a large, new stake in SPDR Gold Trust. The firm, led by former Goldman Sachs trader Eric Mindich, held almost 6.6 million shares of the ETF at the end of June.
Gold buying is also evident elsewhere, citing reports on Iranian state-controlled news agency Fars that Iran imported 23 tons of gold between April and July, compared to 22 tons for the entire past 12 months. China, which recently moved to liberalize its gold trading and buying system, expanded its gold production. “In the first half of the year, 159.24 tons of gold were produced according to the Ministry of Industry and Information Technology, which is 8.7% more than the year before. As gold demand in China is rising at the same time, the gold will not show up on the world market and therefore not weigh on prices.
Other metals kept their losses despite gold’s reversal, with silver for September delivery retreating 20 cents, or 1.1%, to $18.39 an ounce. September palladium settled $6.90 lower at $490.40 an ounce, while October platinum lost $10.10 to end at $1,536.50 an ounce.September copper, however, also reversed to gains, adding a penny to finish $3.35 a pound.
SOURCE: WALL STREET GRAND JOURNAL
