Gold Hits Two-Month High
Source: MarketWatch, Moming Zhou (8/4/09)
"Gold futures rose Tuesday. . .climbing to the highest level in two months"
The London-based firm GFMS said Monday signatories of the Central Bank Gold Agreement are expected to sell about 140 metric tons this year, the lowest level since 1994. The firm also said last week second-quarter supply of scrap gold plummeted by more than 40% to 350 metric tons from the previous quarter.
On the Comex division of the New York Mercantile Exchange, August gold futures rose $7.20, or 0.8%, to $963.80 an ounce. The contract rose to $965 earlier, the highest since early June. The more active December contract was up 0.7% to $965.80.
"An even more relevant factor supporting the gold price is that the supply of gold scrap plummeted. . .and full-year official gold sales could reach a 15-year low this year," said analysts led by Barbara Lambrecht at Commerzbank, in a note.
Limiting gold's gains Tuesday, the U.S. dollar rose against most of its rivals after the release of U.S. consumer spending data and pending home sales data. A stronger dollar tends to push gold prices lower as it reduces the metal's investment appeal.
Net official gold sales slumped to 39 metric tons in the first half of 2009, down 73% from a year ago, GFMS said Monday.
The majority of gold sales came from countries that have signed the CBGA, while non-CBGA countries were overall net buyers. The CBGA's signatories sold 92 metric tons of gold in the first half, GFMS said.
Holdings in SPDR Gold Trust, the biggest gold ETF, stood at 1,072.87 metric tons Monday, unchanged from a day ago, according to the latest data from the fund. Holdings dropped nearly 50 metric tons in July.