Price of gold set to rise higher
SEOUL, South Korea - Gold may advance, and is set for a fourth weekly gain, as concern over Europe's sovereign-debt crisis and slowing economic growth spur demand for the precious metal as an alternative investment. Immediate-delivery bullion was little changed at $1,542.45 an ounce at 4:15 pm Seoul time, climbing 0.1 percent for the week. Futures for August delivery were also little changed at $1,544.40 an ounce on the Comex in New York.
"It looks like there's really no way out," said Bruce Ikemizu, head of commodity trading at Standard Bank PLC, referring to the European debt crisis. "That's still bullish for gold."
The European Central Bank has signaled that it may increase interest rates in July, even as higher borrowing costs may exacerbate the crisis that's threatening to push Greece toward a default.
This week, the US Federal Reserve said the economy expanded at a "steady pace" in most of the country while slowing in four of 12 regions, underscoring Chairman Ben Bernanke's statement that record stimulus should be maintained to bolster a "frustratingly slow" recovery. Still, the price of gold is likely to trade between $1,530 an ounce and $1,550 an ounce next week as physical buyers wait for prices to drop below $1,530, Ikemizu said.
Bullion has advanced 27 percent in the past year, reaching a record $1,577.57 an ounce on May 2.
Bloomberg News
(China Daily 06/11/2011 page10)
