Gold Climbs to Record as Platinum Reaches Three-Year High on Haven Demand

Gold rallied for a sixth day to an all-time high as a global economic slowdown and the European debt crisis sent equities lower and boosted demand for a haven. Platinum climbed to the highest level in more than three years.
Immediate-delivery bullion climbed as much as 1.5 percent to $1,879.05 an ounce and traded at $1,872.80 at 9:29 a.m. Singapore time. The metal is up 16 percent in August, heading for its best monthly performance since September 1999.
“Gold has support given the risks are still there so I wouldn’t want to short gold in the current environment,” Jeremy Friesen, commodity strategist at Societe Generale SA, said from Hong Kong.
Asian stocks declined for a third day, extending a global slump, on concern German Chancellor Angela Merkel’s resistance to common euro-area bonds will prolong the region’s debt crisis. Central bankers from around the world will meet in Jackson Hole, Wyoming this week amid speculation Federal Reserve Chairman Ben S. Bernanke may signal a third-round of asset purchases to boost the faltering economic recovery.
December-delivery gold rose as much as 1.6 percent to a record $1,881.90 an ounce. Bullion priced in sterling advanced to an all-time high, while June-delivery gold on the Tokyo Commodity Exchange and December-delivery metal on the Shanghai Futures Exchange climbed to their highest ever.

Hedge Funds

The metal’s relative strength index has topped 70 since Aug. 5, a signal to some investors who study technical charts that the metal may be overbought and set to decline. Exchange-traded product holdings fell for the first time in five days on Aug. 19 to 2,211.095 metric tons after reaching a record 2,216.756 tons on Aug. 8, Bloomberg data show. Hedge funds and other money managers trimmed their net-long gold positions by 2 percent to 200,086 contracts in the week to Aug. 16, data from the U.S. Commodity Futures Trading Commission showed.
“A sharp correction would be triggered by a quick resolution or a clear direction of policy on the fiscal side to help market, which I don’t think would happen anytime soon,” said Friesen. “Conditions still remain bullish.”
Cash platinum advanced as much as 0.9 percent to $1,891.50 an ounce, the highest price since July 2008. Spot silver gained as much as 2.5 percent to $43.9750 an ounce, the highest level since May 3. Palladium gained for the first time in three days, rising 0.2 percent to $753 an ounce.

source: http://www.bloomberg.com/news/2011-08-22/gold-advances-to-record-as-platinum-reaches-high.html