By Glenys Sim - Aug 19, 2011 6:59 AM GMT+0400
One thousand gram gold bars are arranged for a photograph at the Istanbul Gold Refinery in Istanbul, Turkey. Photographer: Kerem Uzel/Bloomberg
Aug. 19 (Bloomberg) -- Francis Lun, managing director at Lyncean Holdings Ltd., an investment holding company in Hong Kong, talks about the global economy, financial markets, and his investment strategy. Fortescue Metals Group Ltd., Australia’s third-biggest producer of iron ore, said full-year profit rose 76 percent, less than analysts estimated, as sales and prices surged. Lun speaks with John Dawson on Bloomberg Television's "On the Move Asia." (Excerpts. Source: Bloomberg)
Aug. 19 (Bloomberg) -- Stephen Davies, chief executive officer of Javelin Wealth Management Ltd. in Singapore, talks about the global financial markets and his investment strategy. Davies also discusses the outlook for the U.S. economy and Federal Reserve monetary policy. He speaks with John Dawson on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Gold rallied to an all-time high, poised for the longest run of weekly gains since April 2007, as escalating concern that the global economy is slowing drove equities and commodities lower, spurring demand for a haven.
Immediate-delivery bullion, which touched a high of $1,839.30 an ounce, rose 0.8 percent to $1,838.70 at 10:52 a.m. for a 5.3 percent advance this week. The metal is set for a seventh weekly gain as worse-than-expected U.S. economic data and Europe’s debt crisis boosted speculation growth will falter.
“Gold’s role as a safe haven will strengthen amid a slowing economic recovery, mounting debt-rollover needs in Europe, and sharp market corrections,” said Cai Hongyu, an analyst at China International Capital Corp., the country’s biggest investment bank.
The December-delivery contract climbed as much as 1.1 percent to a record $1,841.80 an ounce on the Comex in New York. Futures have jumped 5.7 percent this week. Gold in Swiss francs, South African rand, New Zealand and Canadian dollars and euros surged to all-time highs today, while June-delivery gold on the Tokyo Commodity Exchange also rallied to its highest ever.
Asian stocks extended a global rout today after a Philadelphia-area manufacturing index sank to the lowest level since 2009, U.S. jobless claims rose, and existing home sales fell. Morgan Stanley and Deutsche Bank AG yesterday cut forecasts for China’s growth, predicting that weaker expansions in the U.S. and Europe will hurt the country’s exports.
Sweden’s financial regulator said the country’s lenders must do more to prepare for a worsening debt crisis in the region as the Wall Street Journal reported American regulators are intensifying scrutiny of the U.S. arms of Europe’s largest banks.
China Gold
Immediate-delivery gold of 99.95 percent purity on the Shanghai Gold Exchange, the benchmark cash contract, surged to a record 378 yuan ($59.10) a gram today, while bullion of 99.99 percent purity touched 378.10 yuan a gram, its highest ever. The metal for December-delivery on the Shanghai Futures Exchange advanced for a fourth day, gaining as much as 2.9 percent to an all-time high of 381.09 yuan a gram.
“China will become an increasingly important driver in the gold market as renminbi internationalization advances and Chinese household’s investment demand increases,” said Cai.
China’s gold investment demand surged 44 percent in the second quarter from a year ago to 53 metric tons, the World Gold Council said yesterday. That was second-largest after India. China’s jewelry demand gained 16 percent to 102.9 tons, it said.
Inflation Threat
Gold, up 29 percent this year, is in the 11th year of a bull market, the longest winning streak since at least 1920, as investors seek to protect their wealth from declining equities, depreciating currencies and accelerating consumer prices.
“Medium term, the disorder of the global monetary system and long-term inflation threat will amplify gold’s nature as a currency and an inflation hedge,” said Cai.
The cost of living in the U.S. rose 0.5 percent in July from June, more than twice the 0.2 percent median forecast of economists surveyed by Bloomberg News. In China, inflation quickened last month to the fastest pace in three years.
Spot silver gained as much as 0.5 percent to $40.82 an ounce after reaching a two-week high of $40.93 yesterday. Cash platinum was little changed at $1,842 an ounce and palladium rose 0.3 percent to $758.88 an ounce.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
