Gold surges on safe-haven buying ahead of G20 summit

11:40, June 26, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange extended gains on Friday, as investors remained skittish before G20 summit this weekend in Canada, where world leaders will discuss how to keep world economic recovery on track. Silver and platinum both advanced.

The most active gold contract for August delivery climbed 10.3 dollars, or 0.8 percent, to finish at 1,256.2 U.S. dollars.

The U.S. Commerce Department said earlier Friday that the U.S. economy grew at a 2.7 percent annual pace in the first quarter, which was weaker than 3 percent economists originally expected. The slight downward revision in US GDP, along with a string of lower-than-expected economic data released this week worsened investor's concerns over U.S. economic recovery, and supported gold by increasing its safe-haven appeal.

Meanwhile, the cost of insuring Greek sovereign debt against default soared to a record high on Friday, pressured by investors' fundamental concerns that sluggish economic growth may hamper the nation's ability to avoid restructuring its debt.

The surging costs to protect Greek debt from default and the uncertainty ahead of the G20 meeting this weekend in Canada ,as well as the weakening dollar all contributed to prompt investors to pile into safe-haven assets as gold. Gold price once hit an intraday high of 1259.5 dollars per ounce, and closed shy of last Friday's record close of 1258.3 dollars an ounce.

July silver surged 37.4 cents, or 2.0 percent, to settle at 19. 110 dollars per ounce, July platinum climbed 8.9 dollars, or 0.6 percent, to settle at 1570.4 dollars per ounce.

Source: Xinhua


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