By Halia Pavliva
Jan. 23 (Bloomberg) -- Gold prices rose to a two-week high on demand for a haven as global equities tumbled amid the recession and a slump in corporate earnings. Silver was little changed.
Europe’s Dow Jones Stoxx 600 Index today dropped to the lowest since April 2003. This week, the MSCI World Index of shares has declined almost 6 percent, while gold has rallied 4.3 percent.
“There is a lot of fear,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois, “Things are bad here, but they are worse” in Europe, he said.
Gold futures for February delivery climbed $17, or 2 percent, to $875.80 an ounce at 10:05 a.m. on the Comex division of the New York Mercantile Exchange. Earlier, the price reached $884, the highest since Jan. 5.
Gold rose 5.5 percent last year, the eighth straight gain, as the Standard & Poor’s 500 Index fell 38 percent.
“We are back to the same situation where money has nowhere to go and gold remains the safe haven of choice,” Miguel Perez- Santalla, a sales vice president at Heraeus Precious Metals Management in New York, said in an e-mail.
The rally may stall around $900, Perez-Santalla said. “The industry that consumes the metal cannot support that price.”
Silver futures for March delivery were little changed at $11.37 an ounce. The price has climbed more than 1 percent this week.
Platinum, Palladium
Platinum futures for April delivery rose $3.20, or 0.3 percent, to $938.10 an ounce on the Nymex. The metal is down 1.6 percent this week.
Palladium futures for March delivery gained $1.20, or 0.7 percent, to $186 an ounce. The price is little changed this week.
Platinum and palladium are used mostly for pollution- control devices in cars.
“Actual consumption is close to nil, and until the economy starts to turn around, this will be the trend, so I wouldn’t bank on any rally” in platinum and palladium, Perez-Santalla said.
To contact the reporter on this story: Halia Pavliva in New York at hpavliva@bloomberg.net.
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