Gold rose Wednesday as bargain-hunting investors bought contracts, convinced that continuing economic uncertainty will bolster the value of precious metals.
Gold for December delivery rose $25.60, or 1.6 per cent, to $1,641.60 an ounce. December silver gained 51.3 cents, or 1.7 per cent, to close at $30.352.
Gold prices have been sliding on concerns that a rally that began this summer was unsustainable. Gold hit a high of $1,891.90 an ounce on Aug. 22 and has fallen since then. As gold flirts with $1,600 an ounce, it has become an attractive investment for those who think the European debt crisis will continue to roil currency markets and the global economy. Gold is often seen as a safe-harbour investment when the economy is uncertain.
A key factor underlying gold’s value is continued strife in Europe, where finance ministers are struggling to settle on a rescue plan for debt-laden countries like Greece, said Rohit Savant, senior commodities analyst with CPM Group in New York.
“As long as that uncertainty is around the market, that would provide support for gold as a safe haven,” Savant said.
Industrial metals fell Tuesday. A rising stock market boosted the outlook for demand in the world’s factories, which use metals like copper and palladium in manufacturing. The Dow Jones Industrial Average was up about 1 per cent in afternoon trading.
Copper for December delivery gained 0.25 cents, or 1 per cent, to end at $3.1060 a pound. January platinum rose $14.30, or 1 per cent to finish at $1,482.90 an ounce and December palladium rose $6.20, or 1 per cent, to $570.35 an ounce.
Oil prices rose. Benchmark oil jumped $4.01, or 5.3 per cent, to end at $79.68 per barrel on the New York Mercantile Exchange.
Heating oil rose 5.32 cents to finish at $2.7766 per gallon, gasoline futures gained 8.08 cents to $2.5692 per gallon and natural gas fell 6.8 cents to $3.57 per 1,000 cubic feet.
December wheat gained 21.25 cents to finish at $6.2525 per bushel, December corn was up 17.75 cents to finish at $6.055 per bushel and November soybeans gained 3.75 cents to $11.6375 per bushel.