Nicholas Larkin and Glenys Sim
Sept 27, 2011
Gold gained for the first time in five days in London as the biggest three-day drop since October 2008 spurred some investors to buy the metal on concern about economic growth and debt crises.
Bullion slumped 8.8 percent in the previous three days as some investors sold to cover losses in other markets, which plunged on concern there may be another global recession. The metal has slid 13 percent from its Sept. 6 record and last week’s plunge prompted CME Group Inc. (CME) to raise margin requirements on futures contracts. Physical demand for gold is “exceptionally strong,” UBS AG said today in a report.
“Although not many are yet prepared to dip their toes back in the market, there is a small but growing group who believe this pullback will prove to be a good buying opportunity,” Edel Tully, a London-based analyst at UBS, wrote today in report. “Gold needs to stabilise for now, after suffering a good deal of reputational damage with recent wild moves.”
Immediate-delivery gold gained $35.65, or 2.2 percent, to $1,662 an ounce by 9:27 a.m. in London. It dropped to $1,532.72 yesterday, the lowest level since July 8. Gold for December delivery was 4.4 percent higher at $1,664.10 on the Comex in New York.