NEW YORK (Reuters) - Gold eased on Friday, but the metal posted its biggest quarterly gain in more than two years as market stimulus and easy monetary policies by central banks around the world boosted bullion’s inflation-hedge appeal.
The metal is within reach of its 2012 high, while open interest for U.S. gold futures surged to a one-year high on heavy buying related to fund positioning before the quarter end. (OI hits 1-year high: r.reuters.com/cud92t)
Gold priced in euro terms hit a record for a second straight day, highlighting the currency’s weakness and bullion’s safe-haven status among Europeans in times of economic uncertainty.
Bullion found support after an audit of Spain’s major banks showed they would need extra capital to ride out an economic downturn, and France’s Socialist President Francois Hollande unveiled higher levies on business and a 75-percent tax for the super-rich in a 2013 budget.
“Gold is being utilized as a protest by investors against governments which are failing miserably to solve their deficit and debt problems,” said Jeffrey Sica, chief investment officer of SICA Wealth Management, which has over $1 billion in assets.
Sica said that gold should rise to a record $2,000 an ounce in the fourth quarter as investors piled into the safe-haven metal while other assets such as equities and bonds fell out of favor.
Spot gold was down 0.4 percent at $1,770 an ounce by 2:33 p.m. EDT (1833 GMT), sharply off an earlier high of
Gold still climbed around 11 percent this quarter, its best quarterly gain since the second quarter of 2010. September’s gain of almost 5 percent also extended its monthly rise to a four consecutive month.
U.S. COMEX gold futures for December delivery settled down $6.60 an ounce at $1,773.90, with trading volume about 20 percent below its 250-day average, preliminary Reuters data showed.
COMEX futures’ open interest surged 11,579 lots or 2 percent to a one-year high of 492,149 lots as of Thursday. The gauge which measures outstanding long and short gold futures contracts has rallied more than 25 percent in the past 30 days.
Some funds had added gold to “dress up” their third-quarter performance before the quarter ended, said George Gero, vice president of RBC Capital Market.
Bullion prices took off after the U.S. Federal Reserve said earlier this month it would pump $40 billion into the economy each month until it saw a sustained upturn in the weak jobs market. Gold investors also took heart on signs the European Central Bank and the People’s Bank of China will ease their monetary policies to stimulate growth.
The precious metal has posted a positive quarter in terms of investment in gold exchange-traded funds. ETFs tracked by Reuters are on track for their biggest quarterly inflows in well over a year at around 3.3 million ounces.
Coin dealers said sales of U.S. American Eagle gold coins rebounded as bullion prices rallied, and they are optimistic about sales in the fourth quarter.
September sales of American Eagles, however, are set to be the lowest since 2007.
Other precious metals also recorded a positive quarter, with silver the star performer, rising about 25 percent. On Friday, spot silver was down 0.8 percent at $34.37 an ounce.
Spot platinum climbed 1 percent to $1,659.24 an ounce for a 15 percent quarterly rise, while spot palladium was up 0.7 percent at $634.40 an ounce, up over 9 percent this quarter.
US Gold DEC 1773.90 -6.60 -0.4 1769.50 1785.90 134,714
US Silver DEC 34.577 -0.089 -0.3 34.395 34.925 41,358
US Plat OCT 1665.30 19.40 1.2 1650.60 1673.20 688
US Pall DEC 640.80 5.40 0.8 636.00 644.10 3,309
Gold 1770.00 -7.29 -0.4 1767.85 1783.10
Silver 34.370 -0.260 -0.8 34.380 34.850
Platinum 1659.24 16.04 1.0 1653.25 1672.49
Palladium 634.40 4.10 0.7 636.00 641.50
US Gold 144,051 159,398 173,576 16.71 -0.06
US Silver 43,360 60,350 57,792 35 7.00
US Platinum 9,022 16,358 9,634 22.69 -0.07
US Palladium 3,312 7,532 4,828
Additional reporting by Jan Harvey in London; editing by Jim Marshall and Gunna Dickson