Gold Advances to Two-Month High on Haven Demand Amid Global Equity Slump

Gold futures rose to a two-month high as slumping global equity markets boosted the appeal of bullion for investors seeking a haven.

The MSCI World Index of stocks has dropped about 4 percent in August, heading for the biggest monthly decline since May, on concern that the economic rebound is slowing. Before today, gold gained 13 percent this year, reaching a record $1,266.50 an ounce in June.

“Gold is the primary beneficiary of this general angst over the economy,” said Matthew Zeman, a metal trader at LaSalle Futures Group in Chicago. “The flight-to-safety bid is back on, and Treasury yields are a joke now. That’s a good setup for gold to go higher.”

Gold futures for December delivery rose $8.60, or 0.7 percent, to $1,247.80 an ounce at 11:11 a.m. on the Comex in New York. Earlier, the price touched $1,249.40, the highest since June 28.

Before today, bullion had climbed 4.7 percent in August, heading for the biggest monthly gain since April.

The metal, which has rallied for nine straight years, also rose to the highest price since July 1 in British sterling. Gold priced in Canadian dollars and Indian rupees also gained.

Treasury 10-year notes rose as their yields headed for the biggest decline since the end of 2008, when the Federal Reserve slashed the benchmark interest rate to between zero and 0.25 percent to revive the economy.

“There’s a lot of skepticism about the U.S. being a safe haven going forward,” said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago. “If people aren’t comfortable in Treasuries, they’re going to shift into gold.”

Silver, Platinum

Silver futures for December rose 21.6 cents, or 1.1 percent, to $19.29 an ounce on the Comex. The metal is also headed for a monthly gain.

Platinum, which has wider industrial applications than gold, headed for a monthly loss.

Platinum futures for October delivery fell $9.40, or 0.6 percent, to $1,523.70 an ounce on the New York Mercantile Exchange. Palladium futures for December delivery were up 90 cents, or 0.2 percent, to $501 an ounce.