August 2 - Gold may advance toward a record as concern that global economic growth may be slowing overshadowed a U.S. debt deal reached in time to avert a default, spurring demand for wealth protection.
Immediate-delivery gold, which reached an all-time high of $1,632.80 an ounce on July 29, was little changed at $1,619.60 at 9:48 a.m. in Singapore after losing 0.6 percent yesterday. Holdings in exchange-traded products rose to 2,153.574 metric tons yesterday, the highest level ever, Bloomberg data show.
Manufacturing indexes from the U.S. to Europe and China declined in July, raising concern that the global recovery is losing momentum. Still, spot gold declined for the first time in three days yesterday after the House of Representatives passed the measure to raise the U.S. debt limit by at least $2.1 trillion and cut federal spending by $2.4 trillion or more. The plan goes to the Senate for a final vote today.
“Increasing the debt ceiling is not going to make the debt go away, while the debt problems in Europe aren’t going to be resolved overnight, and we’re seeing all these getting reflected in the weaker economic numbers,” said Zhang Yingying, an analyst at Galaxy Futures Co., a brokerage that’s 16.7 percent owned by the Royal Bank of Scotland Group Plc.
Gold for December delivery in New York was little changed at $1,622.30 an ounce, after futures reached a record $1,637.50 on July 29. Spot silver gained 0.5 percent to $39.47 an ounce.
The Institute for Supply Management said yesterday that its manufacturing index dropped to 50.9 last month from 55.3 in June, compared with the median estimate of 54.5 in a Bloomberg News survey. In China, the Purchasing Managers’ Index was at 50.7 compared with 50.9 in June, while a manufacturing gauge in the euro region dropped to 50.4 from 52, reports yesterday showed.
Cash platinum was little changed at $1,790 an ounce while palladium shed 0.3 percent to $826.50 an ounce.