Gold Climbs for First Time in Three Days as U.S. Faces ‘Crisis’

By Glenys Sim

Feb. 10 (Bloomberg) -- Gold advanced for the first time in three days in Asia as concern at the slowing global economy and the metal’s dip below $900 an ounce lured buyers.

Bullion rose as investors sought haven assets on speculation President Barack Obama’s $827 billion stimulus package won’t lead to a rapid recovery by the U.S. economy. Obama said the U.S. faces a “full-blown crisis.”

“Gold and silver should continue to benefit from falling interest rates, reflation of Western economies and the adoption of unconventional monetary policy,” Robin Bhar, an analyst at Credit Agricole SA’s Calyon investment-banking unit in London, wrote in a report.

Bullion for immediate delivery added as much as 0.7 percent to $900.35 an ounce and was at $897.19 at 1:38 p.m. in Singapore. It has traded above $900 in each of the past 12 days and reached $929.70 on Jan. 30, the highest since Oct. 10.

Silver rose as much as 0.7 percent to $12.9338 an ounce, and stood at $12.89 at the same time.

“For as long as sentiment in the market remains positive towards gold then silver is likely to make further attempts at the upside, but these levels are not fundamentally justified and should be viewed with extreme caution,” said David Wilson and Stephanie Aymes, analysts at Societe Generale in a note yesterday.

“Silver’s industrial base, combined with the economic outlook means that this year’s market is likely to be in a surplus of supply over industrial demand,” the analysts said.

Among other precious metals for immediate delivery, platinum gained 0.3 percent to $993.50 an ounce, and palladium jumped 1.6 percent to $210.75 an ounce.

To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net