Gold Heads for Longest Weekly Rally Since March on Haven Demand

San Francisco (July 11)  Gold held near a four-month high, heading for the longest run of weekly gains since March, as concern Europe’s economy remains vulnerable to shocks and rising tension in the Middle East boosted haven demand. Palladium traded near a 13-year high, set for a fourth weekly advance.

Bullion for immediate delivery was at $1,336.46 an ounce at 8:12 a.m. in Singapore from $1,335.75 yesterday, according to Bloomberg generic pricing. The metal rallied to $1,345.17 yesterday, the highest price since March 19, and is heading for a sixth weekly climb.

Gold rose 1.2 percent this week, in part as minutes of the U.S. Federal Reserve’s last meeting showed some officials were concerned investors may be complacent about the economic outlook. Portugal’s Banco Espirito Santo SA’s parent company missed debt payments, fueling concern that the euro region may be struggling to emerge from the sovereign-debt crisis. Israeli leaders signaled they were preparing to invade Gaza.

“Gold moved higher, attracting safe-haven buying as financial market concerns re-emerged,” James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note. “There is also a geopolitical dimension.”

Gold gained 11 percent this year as the pace of sales from exchange-traded products slowed amid expectations that U.S. interest rates will remain low and as geopolitical tensions around the world rose. Israeli leaders want to stop a hail of rockets on Israel from the Hamas-controlled Gaza Strip.

Bullion’s advance lifted its 14-day relative-strength index above the level of 70 yesterday for the first time in a week, suggesting to some investors who study charts that prices may reverse. The gauge was at 71.4 today.

SPDR Holdings

Gold for August delivery fell 0.2 percent to $1,336.60 an ounce on the Comex in New York. Holdings in the SPDR Gold Trust, the largest bullion-backed exchange-traded product, erased this year’s decline in assets on July 8.

Palladium for immediate delivery added 0.1 percent to $871.47 an ounce, set for a fourth weekly increase. The metal rose to $877.29 yesterday, the highest since February 2001, then erased gains to snap an 13-day winning run.

Spot platinum traded at $1,511.75 an ounce from $1,513.19 yesterday, when prices rose to $1,519.68, the highest level since Sept. 4. The metal is poised for a fourth weekly gain that’s the longest stretch since March.

Silver increased 0.1 percent to $21.424 an ounce after climbing to $21.582 yesterday, the highest price since March 17. The metal is heading for a sixth weekly advance, the longest such run since April 2011.

Source: Bloomberg