2-Week low price revives investor appetite for gold

LONDON: Gold gained for the first time in five days in New York, cutting a weekly loss, as a drop to twoweek low spurred investors to buy the metal as a protection of wealth. Gold futures slipped to $1,604.70 an ounce on Thursday , the lowest price since October 5, and are heading for the first weekly drop in three. Prices have retreated 15% since touching a record early last month.

European leaders meet this weekend in Brussels as they seek to contain the region’s debt crisis. “The price drop definitively offers an attractive buying opportunity,” said Daniel Briesemann , an analyst at Commerzbank in Frankfurt. “Gold is still seen as a safe haven or a store of value at least in the mid to long term.” Gold for December delivery gained $23.50, or 1.5%, to $1,636.40 an ounce by 7:59 a.m. on the Comex in New York.

Prices are down 2.8% this week. Immediate-delivery gold was 0.9% higher at $1,635.09 in London. Bullion is in the 11th year of a bull market and futures reached a record $1,923.70 an ounce on September 6 as investors sought to diversify away from equities and some currencies.

The metal is up 15% this year. Euro-area leaders may combine the region’s temporary and planned permanent rescue funds as of mid-2012 to release as much as 940 billion euros ($1.3 trillion) to fight the debt crisis. The plan is also aimed at breaking an impasse between Germany and France.
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leaders meet on October 23 and a second summit for October 26 was set on Thursday. Global equities and commodities are also headed for weekly declines. ‘Frustrated’ Supporters “Gold’s positive correlation with risk continues,” Edel Tully, a London-based analyst at UBS, wrote on Friday in a report.

“The difficulty in trading gold at the moment has frustrated many of its supporters, which is probably why the yellow metal has been struggling to sustain upside attempts, in addition to it having trouble bouncing off the lows.” Silver for December delivery rose 2.5% to $31.04 an ounce. Palladium for December delivery was up 4.7% at $611.85 an ounce. Platinum for January delivery gained 1.1% to $1,507.10 an ounce.