Gold near 3.5-month high on Portugal bank worries
Gold fell for the first time in three days Friday but continued trading near a 3.5-month high with demand steady on investor concern about Portugal’s biggest bank.
Spot gold changed hands at $1,336.00 an ounce around 2:20 p.m. EST, up 70 cents from Thursday’s close of $1,335.30. Earlier Thursday it reached $1,345, its highest level since mid-March.
Meanwhile on Friday, gold futures for August delivery traded around $1,337 per ounce on New York’s Comex.
Gains in European shares following declines Thursday put some downward pressure on the yellow metal. But market participants remain worried about the euro zone’s financial health as trading in Banco Espirito Santo’s stock has been suspended.
In times of political or financial turmoil, investors seek a safe haven in gold, whose price was pushed up sharply during the European debt crisis.
Escalating violence in Israel and the U.S. Federal Reserve’s benign stance on interest rates are also supporting gold.
Also Thursday, India maintained a 10% duty on bullion imports. That prompted jewellers awaiting a reduction of the duty to resupply.
India raised the duty last year sparking a dramatic increase in gold smuggling, which yesterday’s move may exacerbate.
Precious metals have outperformed other commodities this year with double-digit gains for gold and palladium and a strong performance for silver and platinum.