Gold may climb for a fourth day on European crisis, China imports
SHANGHAI: Gold may rise for a fourth day in London as concern about Europe's debt crisis spurs demand for a protection of wealth and as China's bullion imports surged. Palladium climbed to a nineyear high.
China's gold imports jumped almost fivefold in the first 10 months from the entire amount last year as concern about rising inflation increased its appeal as a store of value, the Shanghai Gold Exchange said. The dollar fell against the euro before the European Central Bank announces its decision on interest rates and any steps to stem the region's fiscal woes. Gold reached a record $1,424.60 an ounce on Nov. 9.
"While the return of risk appetite hasn't crimped gold's safe-haven appeal, decent resistance is blocking the yellow metal's return to $1,400," Edel Tully, an analyst at UBS AG in London, said in a report. "Market attention today will be focused on the European Central Bank meeting," and the Chinese import comments "have added to gold's appeal," she said.
Immediate-delivery bullion added $3.72, or 0.3 percent, to $1,391.63 an ounce at 10:10 a.m. in London. It yesterday reached $1,397.50, the highest price since Nov. 12. The metal for February delivery was 0.3 percent higher at $1,392.70 on the Comex in New York.
The euro this week fell to a two-month low versus the dollar as concern deepened that the region's debt crisis would spread. Policy makers will today keep their benchmark rate at a record low 1 percent, according to all 52 economists in a Bloomberg survey. ECB President Jean-Claude Trichet will hold a press conference in Frankfurt following the decision. China's imports gained to 209 metric tons compared with 45 tons for all of 2009, Shen Xiangrong, chairman of the bourse, told a conference in Shanghai today. -Reuters