Greece’s political crisis and a decline in equities spurred demand for gold as an alternative asset, pushing it up for the second straight session.
The euro declined to the lowest since March 2006 amid a debate on Greece’s membership in the European Union.
The MSCI All-Country World Index of
stocks declined as much as 1.4 percent. Last year, gold declined 1.5
percent as U.S. equities climbed to a record.
Gold futures for February delivery advanced 0.9 percent to $1,197.30 an ounce at 9:53 a.m. on the Comex in New York. On Jan. 2, the price rose 0.2 percent.
“The turmoil in Greece and the weakness in equities is bringing some investors to gold,” Adam Klopfenstein, a senior market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “We are seeing a rise in the haven premium of gold.”
“Greece probably doesn’t have the potential to cause a systemic crisis as it did a few years ago, but if you’re short gold, you probably want to cover,” Robin Bhar, an analyst at Societe Generale SA in London, said in a telephone interview.
Speculation that the European Central Bank
is moving closer to large-scale sovereign-bond purchases pushed the
euro lower, helping gold priced in the currency to climb to the highest
since September 2013.
Last year, in 2014, gold posted a consecutive annual decline for the first time since 1998 as inflation remained muted amid bets that the Federal Reserve will raise U.S. interest rates. Global holdings in exchange-traded products backed by the metal slumped 9.3 percent last year after tumbling 33 percent in 2013.
The outlook for gold is “skewed to the downside” because the correlation with crude oil and euro has strengthened, along with prospects for a U.S. rate increase in mid-2015, Barclays Plc said today in report.
Silver futures for March delivery climbed 2.7 percent to $16.19 an ounce on the Comex. Last year, the metal slumped 19 percent, capping a consecutive annual decline for the first time since 1992.
