Gold Trades Near $1,000, Heading for Best Week Since April
By Kim Kyoungwha
Sept. 4 (Bloomberg) -- Gold traded near $1,000 and was set for its strongest weekly advance since April after the price broke through a technically important level, luring investors.
Gold was at $990.50 an ounce, close to a six-month high, after climbing 3.8 percent this week. A move through $976 means gold may have resumed a “bull-run,” targeting $1,033 and then potentially a high of $1,106, according to Barclays Capital.
“We have seen a lot of short covering and new buying,” Jonathan Barratt, managing director at Commodity Broking Services Pty, said in a phone interview today. “The move is technically driven. We’ve not seen any real fundamentals that would suggest that this rally can be sustainable.”
Gold for immediate delivery was little changed compared with a $991.85 close yesterday. Silver has jumped 10 percent this week to $16.14 an ounce.
Twenty-one of 26 traders, investors and analysts surveyed by Bloomberg News, or 81 percent, said bullion would rise next week. Four forecast lower prices, and one was neutral.
Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, increased 14.65 metric tons to 1,078.01 metric tons as of Sept. 3, according to figures on the company’s Web site.
That compares with “the massive inflows of between 20 and 30 tons per day in spring,” when flight-to-quality purchases drove gold up to $1,000, Eugen Weinberg, a senior analyst with Commerzbank AG, wrote in a note yesterday.
“There is the risk of a sharp correction should speculative investors decide to take profits,” Weinberg said. The “proximity of the gold price to the $1,000 mark means that speculative demand is likely to stay high in the short term.”
Platinum for cash delivery gained 1 percent to $1,264.50 an ounce and palladium added 0.2 percent to $291.25 an ounce.
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