From Bloomberg:
Gold futures fluctuated after approaching a record high as a rebound in equity markets damped demand for the precious metal as a haven.
U.S. and European equities advanced as improved demand for Portuguese and Polish bonds eased sovereign-debt concerns. Earlier, gold climbed to $1,264.70 an ounce. The intraday record of $1,266.50 was on June 21. Yesterday, the price closed at an all-time high of $1,259.30.
"Gold is running into some resistance at the record highs," said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. "You can have a stock-market rally, but until the government can rev up some jobs into this recovery, they're going to still have to keep their money in the market. Gold doesn't have to rise. It just has to hold its value."
Gold futures for December delivery rose 40 cents to $1,259.70 at 11:20 a.m. on the Comex in New York. Earlier, the price dropped as much as 0.4 percent after gaining by the same amount.
The Federal Reserve and the European Central Bank have kept interest rates at record lows to revive the global economy. The Bank of Canada said today that the nation's recovery will be slower than projected because of the weaker outlook for the U.S. economy.
Gold, traditionally a hedge against rising consumer prices, rallied 15 percent this year as of yesterday amid tame inflation.
'Investment Demand'
"If you're positioning for inflation, you've probably got a while to wait," said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. "It's investment demand that's driving gold now. People want to hold an asset that doesn't lose money."
Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were unchanged at 1,294.44 metric tons yesterday. Holdings have increased 14 percent this year.
Silver futures for December delivery rose 11.6 cents, or 0.6 percent, to $20.03 an ounce on the Comex. Earlier, the price reached $20.18, the highest level for a most-active contract since March 2008.
Platinum futures for October delivery gained $7.10, or 0.5 percent, to $1,563.40 an ounce on the New York Mercantile Exchange.
Palladium futures for December delivery climbed $5.15, or 1 percent, to $528.35 an ounce.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at
pnguyen@bloomberg.net.
More on gold:
How to know if you own enough gold
Why gold is nearly guaranteed to end the year higher
China is building a floor under gold prices... much higher than anyone expects
