Gold rose to a one-week high on speculation that Europe’s sovereign-debt crisis may spread, boosting the appeal of the precious metal as a haven. Silver gained for the fourth straight session.
The euro fell against the dollar after Moody’s Investors Service said it may lower Ireland’s credit rating by more than one level. Gold has advanced 24 percent this year, reaching a record $1,424.30 an ounce on Nov. 9.
“Because of the euro’s reaction to the bailout, a lot of people are moving back into gold for safety,” said Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago.
Gold futures for December delivery rose $5.50, or 0.4 percent, to settle at $1,357.80 at 1:56 p.m. on the Comex in New York. Earlier, the price reached $1,364.80, the highest since Nov. 15. The metal declined 3.2 percent in the previous two weeks.
Gold priced in euros rose to a record in June after a Greek bailout.
Silver futures for December delivery rose 28.2 cents, or 1 percent, to $27.461 an ounce. The metal gained 7.7 percent in the previous three sessions and is up 63 percent this year.
Gold’s rally was limited on signs that some investors are locking in profit for the year. The metal headed for the 10th straight annual gain.
Speculative long positions, or bets prices will rise, outnumbered short positions by 218,479 contracts on the Comex, the U.S. Commodity Futures Trading said on Nov. 19. Net-long positions fell 27,700 contracts, or 11 percent, from a week earlier, the biggest drop since mid-July.
‘Big Players Liquidating’
Last week, bets on a rally by hedge-fund managers and other large speculators dropped to the lowest since August, government data show.
“A lot of big players are liquidating to book profit for the year,” said Frank Lesh, a trader at FuturePath Trading in Chicago. “There’s not a lot of incentive here to be an aggressive trader.”
Bets on a silver rally declined for the seventh straight week to the lowest since late February.
“During the commodity liquidation a week ago, large investors withdrew money from precious-metals markets,” said Tom Pawlicki, an analyst at MF Global Holdings Ltd. in Chicago. “Liquidation may continue as fundamental support becomes weaker.”
Palladium futures for December delivery fell $19, or 2.7 percent, to $684.70 an ounce on the New York Mercantile Exchange. The price has surged 67 percent this year.
Platinum futures for January delivery dropped $15.60, or 0.9 percent, to $1,655.50 an ounce. The metal has gained 13 percent this year.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.
Source: http://www.bloomberg.com/news/2010-11-22/gold-futures-fluctuate-on-signs-traders-locking-in-profit-after-2010-rally.html
