Renewed concerns about the euro-zone government debt pushed gold back above the key $ 1,500 level and silver pushed higher after sell-off last week provided what some see as potential bargains.
The most actively traded gold contract was recently up $ 12.30, or 0.8%, to $ 1,503.90 a troy ounce on the Comex division of the New York Mercantile Exchange. May gold was up around $ 13.30, or 0.9%, to $ 1,504.50.
Gold had lost 4.8% last week and Thursday before U.S. nonfarm payrolls increased by renewed concerns that rising consumer and producer prices are on the horizon amidst loose monetary policy. Gold and silver are seen as hedges against inflation.
Meanwhile, the rising trade down payment requirements, known as the margins, forced investors silver, which lost 27% last week to escape.
“Silver had fallen so violently,” said Sterling Smith, an analyst with Country Hedging. “We see a little more on bargain hunting ahead of silver”
Comex July silver was recently $ 1,578, or 4.5%, to $ 36 865 a troy ounce, while the nearby May contract rose $ 1,557, or 4.4%, at $ 36,840.
Demand for the metals, which are considered safe places to invest in times of economic uncertainty, were higher Monday amid a renewed focus on the euro-zone debt problems.
The cost of insuring debt in the eurozone was higher, while banking stocks were lower after a report late last week that Greece was considering leaving the 17-nation currency bloc. That report, by the German magazine Der Spiegel, was later denied.
Gold was also finding support on the news that several central banks have recently increased their holdings in the yellow metal.
International Monetary Fund data showed the central bank of Mexico nearly 100 tonnes of gold bought in February and March, and May data showed continued buying by Russia and Thailand, from 18.8 tonnes and 9.3 tonnes respectively.
source:onlinewsj
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