Gold Rises on Demand for Alternative Investment to Stocks

Gold advanced for a second day as declines in the dollar and equities spurred demand for the precious metal as an alternative investment.

The Stoxx Europe 600 Index retreated 0.9 percent and the Bloomberg Dollar Spot Index declined 0.4 percent.India is on holiday through Oct. 6 and China is off into Oct. 8, limiting gains with the world’s two biggest gold buyers out.

“Stocks are under pressure today and the dollar is not as strong as yesterday,” Afshin Nabavi, a senior vice president at bullion refiner MKS (Switzerland) SA in Geneva, said by phone today. “The two big buyers are out. Next week when they come back I look for a big rally on the upside.”

Gold for immediate delivery rose 0.1 percent to $1,215.37 an ounce by 10:28 a.m. in London, after climbing 0.5 percent yesterday. Resistance is at $1,220 to $1,225, Nabavi said. Futures climbed 0.2 percent to $1,217.90 an ounce on the Comex in New York.

Gold bulls will get more ammunition with jewelry-buying festivals later this month. India’s Diwali festival associated with gold purchases is Oct. 23. That should help gold to rebound to as high as $1,300, Nabavi said. He said he would sell rallies while India and China are out.

Silver rose 0.1 percent to $17.2039 an ounce, platinum fell 0.4 percent to $1,277.88 an ounce and palladium climbed 0.3 percent to $780.50 an ounce.

Source url : http://www.bloomberg.com/news/2014-10-02/gold-rises-on-demand-for-alternative-investment-to-stocks.html