Gold climbed in New York as speculation Europe’s debt crisis is worsening spurred demand for the metal that’s near a 34-month low. Silver advanced.
Gold futures dropped 23 percent in the second quarter, the most since at least 1975, as Federal Reserve Chairman Ben S. Bernanke said that the Fed may slow its asset purchases this year. Two Portuguese ministers resigned from the government and borrowing costs also increased in Spain and Italy. U.S. markets will be closed tomorrow for the Independence Day holiday, a day before a report due that may show more U.S. hiring in June.
The metal slipped 25 percent this year, wiping $59 billion from the value of gold-backed exchange-traded product holdings, as some investors lost faith in it as a store of value. Other physical gold purchases continue to increase and some investors are seeing lower prices as “an opportunity to jump in,” Scott Carter, chief executive officer of Los Angeles-based Lear Capital, said in a Bloomberg Television interview.
“The latest developments in Portugal and Greece suggest that the euro-zone debt crisis is moving back into the forefront of market players’ minds,” analysts at Commerzbank AG wrote today in a report. “Demand for gold as a crisis currency could well pick up again.”