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Gold Rises to Four-Month High as Drop in Dollar Spurs Purchases

By Claudia Carpenter

April 30 (Bloomberg) -- Gold futures climbed to a four- month high as a drop in the value of the dollar spurred demand and some investors bought the metal as a haven from possible losses in the credit markets.

Assets in the SPDR Gold Trust, the biggest investment fund that buys bullion, jumped the most in a year this week through yesterday. The dollar fell for a third day against the euro after European Commission President Jose Barroso said he’s confident a rescue package for Greece will be done “in days.”

“On the one hand, gold is benefiting from dollar weakness, but it’s starting to decouple from currency movements,” said Suki Cooper, an analyst at Barclays Capital in London. “It is very much the safe-haven appeal of gold that is boosting prices.”

Gold futures for June delivery advanced $6.70, or 0.6 percent, to $1,175.50 at 8:24 a.m. on the Comex in New York and earlier rose to $1,178.50, the highest price since Dec. 4. The record is $1,227.50 an ounce on Dec. 3.

Prices of the metal are up 5.5 percent this month, heading for the biggest monthly jump since November, as investors bought gold and the U.S. currency on speculation Greece wouldn’t get loans quickly enough to avoid defaults on its bonds. Gold will probably climb to a record in the third quarter, Cooper said.

SPDR Assets

The 1.7 percent increase in the SPDR assets in the first four days this week is heading for the biggest weekly gain since March 2009, figures from the company show. Holdings yesterday rose to a record 1,159 metric tons. That left assets in 19 gold ETFs worldwide at an all-time high of 1,850.1 tons, Cooper said.

Eighteen of 21 traders, analysts and brokers surveyed by Bloomberg, or 86 percent, said gold may rise next week, the most bullish result since November. Two people expected a decline and one was neutral.

Gold climbed to records in euros, Swiss francs and sterling this week as Standard & Poor’s reduced its credit ratings on Greece, Portugal and Spain.

Silver for delivery in July increased 0.5 percent to $18.67 an ounce and earlier rose to $18.725, the highest price since Jan. 20. Platinum for delivery in July climbed 0.4 percent to $1,740 an ounce on the New York Mercantile Exchange and June palladium futures rose 1.2 percent to $555.50 an ounce.

Prices of palladium, used in jewelry and auto catalysts, have climbed 16 percent this month, heading for the biggest monthly advance since February 2008.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aTR0u19cnGrs