Tomahawk, WI 9/28/2011 (PennyPayDay) – Gold may gain for a second day in London as concern about Europe’s debt crisis spurs demand for a protection of wealth and as physical purchases increase.European equities declined after a report that some countries are demanding private creditors take bigger writedowns on Greek bonds. Bullion dropped 8.8 percent in the three days to Sept. 26, the most since October 2008, as some investors sold to cover losses in other markets. Physical purchases remain “very visible” across much of Asia, UBS AG said today.
Long-term investors and “physical buying will do a lot to help gold rebuild its reputation after the recent ugly selloff,” Edel Tully, a London-based analyst at UBS, wrote in a report. “The panic displayed over the past few days has dissipated to a great extent, though there certainly hasn’t been a stampede back into gold. Instead, the market remains hesitant and gold continues to consolidate. We believe this is healthier than a steep push higher.”
Immediate-delivery gold rose $10.30, or 0.6 percent, to $1,660.43 an ounce by 10:10 a.m. in London. Prices dropped to $1,532.72 on Sept. 26, the lowest since July 8. Gold for December delivery was 0.5 percent higher at $1,660.60 on the Comex in New York.
Gold is in the 11th year of a bull market, the longest winning streak since at least 1920 in London. Prices reached a record $1,921.15 on Sept. 6 as investors sought to diversify away from equities and some currencies.
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