By Nicholas Larkin and Kim Kyoungwha – Bloomberg
Gold rose to a record in London and New York as other commodities gained on speculation demand for raw materials will increase and as investors bought the metal to protect wealth from Europe’s financial turbulence.
China, the world’s third-largest economy, said it may allow the yuan to move higher, making commodities priced in other currencies less expensive for Chinese consumers. Bullion gained in eight of the past nine weeks on speculation debt-cutting measures by European nations will slow expansions. Other precious metals rose to the highest levels in at least a month.
“Gold is benefiting from other commodities,” said Jesper Dannesboe, a senior commodity strategist at Societe Generale SA in London. The China news “is a catalyst, a trigger for buying today. People are still worried about sovereign debt levels.”
Gold, up 15 percent this year, is heading for its 10th consecutive annual gain, the longest winning streak since at least 1920. Bullion has outperformed other commodities as global equities slipped, and this month reached all-time highs in euros, sterling and Swiss francs. Holdings in exchange-traded funds backed by gold reached records, while coin sales from mints accelerated, tightening supplies.
Gold for immediate delivery added as much as $8.50, or 0.7 percent, to $1,265.30 an ounce and traded at $1,261.05 at 1:18 p.m. in London. It surpassed the previous all-time high of $1,262.50 set June 18. The metal for August delivery was 0.3 percent higher at $1,261.90 on the Comex in New York after reaching $1,266.50.
Bullion rose to $1,259.50 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,256 at the afternoon fixing on June 18.