Gold may advance for a third day as investor demand for precious metals as safer assets increases amid Europe's sovereign-debt crisis and escalating tensions between North and South Korea. Silver and palladium rose.
Gold for immediate delivery gained 90 cents to $US1377.30 an ounce in Seoul, reversing an earlier loss. Bullion yesterday climbed to $US1382.50 an ounce, the highest price since Nov. 12. Futures for December delivery pared declines and traded little changed at $US1376.30 an ounce on the Comex in New York.
“People increasingly prefer safer assets,” said Park Jong Beom, a trader at Tong Yang Futures Trading Seoul. “Investors are jittery as Europe is still in trouble and now the Korean tension is there. The safe-haven demand will be around for the time being.”
North Korea yesterday fired artillery shells at the South Korean island of Yeonpyeong near the disputed border between the two countries in the worst attack in at least eight months. The euro yesterday dropped by the most since August against the dollar as credit markets focused on deficits in Spain and Portugal after Ireland sought a rescue package.
Spot gold has gained 26 per cent this year, reaching a record $US1424.60 an ounce on Nov. 9. Gold priced in euros rose to a record in June after a Greek bailout.
The dollar declined 0.2 per cent against a basket of six currencies after yesterday rising to a two-month high. Bullion typically moves inversely to the greenback. Sales of existing homes fell more than forecast in October as foreclosure moratoriums and a lack of credit disrupted the U.S. housing market.
Silver for immediate delivery rose 0.6 per cent to $US27.6675 an ounce in Seoul. Silver held through four exchange-traded product providers rose 51.7 metric tons to 14,930.3 tons as of Nov. 23, the highest amount since at least February, data compiled by Bloomberg show.
Cash platinum advanced 0.7 per cent to $US1,662.75 an ounce and immediate-delivery palladium jumped 1.6 per cent $US699.75 an ounce.