Gold Jumps Most Since November
Source: Bloomberg, Pham-Duy Nguyen and Nicholas Larkin (2/17/10)
". . .speculation that Greek debt concerns will spur demand for the metal as an alternative to holding currency"
European finance ministers pressured Greece to rein in budget deficits and refused to say how they would rescue the nation if it can't contain its debt. Gold rose to a record $1,227.50 an ounce last year as central banks in the U.S., the U.K. and European Union kept lending rates low to revive growth.
"There's a lack of faith in fiat currencies that's driving the market," said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. "There's too many sovereign-debt problems and too many countries printing money. Gold is the only hard asset I'd want to own right now."
Gold futures for April delivery surged $29.80, or 2.7%, to $1,119.80 an ounce on the New York Mercantile Exchange's Comex unit, the biggest gain for a most-active contract since Nov. 3.
The dollar fell as much as 0.9% against a basket of six major currencies. Last year, gold rallied for a ninth straight year, climbing 24% as the dollar slid 4.2%.
"Commodity prices are firming as the dollar weakens," Dennis Gartman, a Suffolk, Virginia-based economist and hedge-fund manager, said in his Gartman Letter today. "The world has become disdainful of currencies generally, and is wrapping its collective arms around gold as the most readily available, reservable and believable currency."