Gold, Silver Rise as Value Seekers Shun Equities
Source: Bloomberg, Pham-Duy Nguyen (4/13/09)
"On April 9, investment in the SPDR Gold Trust. . .rose to a record, the first gain since March 27."
The Dow Jones Industrial Average slid as much as 1.5% on concern that corporate profit will slump. On April 9, investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, rose to a record, the first gain since March 27. In the past three weeks, gold fell as stocks rallied.
"There's some positioning ahead of financial results," said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. "Financials led us down this path, and they're going to be the sector that leads us out. You might see the flight-to-quality buying in Treasuries and gold if earnings don't meet expectations."
Gold futures for June delivery climbed $12.50, or 1.4%, to $895.80 an ounce on the Comex division of the New York Mercantile Exchange, the biggest gain for a most-active contract since March 19.
Silver futures for May delivery rose 43.8 cents, or 3.6%, to $12.768 an ounce. It was also the biggest gain since March 19. The price is up 13% this year.
Gold's gains accelerated after the price failed to close below the 200-day moving average last week, analysts said.
"We're seeing some technical strength," Zeman said. "There's short covering now that the price held the 200-day."