By Pham-Duy Nguyen
March 13 (Bloomberg) -- Gold rose for a third straight day on speculation the recession will widen, boosting the appeal of the precious metal as a store of value. Silver also gained.
Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, has risen 33 percent this year to a record 1,041.53 metric tons. Since the second quarter of 2007, banks worldwide have posted more than $1.2 trillion in credit losses and writedowns. Before today, the Standard & Poor’s 500 Index slid 17 percent this year while gold gained 4.5 percent.
“Gold continues to resist any sustained decline, bouncing back quickly from any minor sell off,” said Adrian Day, president of Adrian Day’s Asset Management in Annapolis, Maryland. “The fly in the ointment could be a sustained and strong, broad global stock-market rally which would calm some investors’ fears. There is little prospect of this on more than a short-term basis in my view, so we continue to be buyers on any dips.”
Gold futures for April delivery rose $11.70, or 1.3 percent, to $935.70 an ounce on the New York Mercantile Exchange’s Comex division. The price rose 3.1 percent in the previous two days.
Silver futures for May delivery climbed 23.7 cents, or 1.8 percent, to $13.18 an ounce in New York. Silver increased 15 percent this year through yesterday.
Metal held by the SPDR Gold Trust yesterday surpassed Switzerland, making the ETF the sixth-largest holder of bullion, based on data from the producer-funded World Gold Council.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
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