Gold Prices Modestly Higher for Second Consecutive Day
Source: MarketWatch, Kate Gibson (7/14/09)
"The run higher came "despite significant gains in equities, indicating gold does not act as a safe haven at present. . ."
August gold futures added to an earlier rise after data showed the U.S. Producer Price Index rose to 1.8% in June.
The contract rose $2.7, or 0.3%, to $925.2 an ounce on the Comex division of the New York Mercantile Exchange, after ending above $920 an ounce on Monday for the first session since July 7.
Lessened worries about deflation after retail sales data also bolstered gold, with the metal recently hit by thoughts of a downward pressure on prices due to the global economic slowdown.
Rebounding after a decline of 1.6% last week, gold on Monday rose $10, or 1.1%, to end at $922.50 an ounce, its first close above $920 since the first week of July.
The run higher came "despite significant gains in equities, indicating gold does not act as a safe haven at present, but is primarily driven by U.S. dollar movements. The latter came under pressure again, as improving equities drove risk aversion down, which in turn provided support for gold," said Barbara Lambrecht, an analyst at Commerzbank.
Holdings of the SPDR Gold Trust—the largest exchange-traded fund backed by bullion—stood at 1,109.81 metric tons on Friday, unchanged from the prior day, according to the company's website. Holdings have fallen more than 22 metric tons in the past month.