Gold prices flat as investors’ risk appetite grows
NEW YORK — Gold prices were little changed Thursday as a surge in stocks weakened the precious metal’s safe-haven appeal.
Energy and grain futures, meanwhile, benefited from investors’ increased risk appetite and moved higher.
On Thursday, a batch of positive earnings reports and upbeat data on the housing market gave investors the green light to pour money into stocks.
Major indexes rose more than 2 percent in afternoon trading, including the Dow Jones industrials, which rose above the 9,000 mark for the first time since early January.
The gains came after the National Association of Realtors said existing home sales rose for the third month in a row in June, jumping 3.6 percent. That stirred hopes that the housing market, one of the biggest problem spots throughout the recession, is stabilizing.
Investors often buy up gold as protection against tumultuous markets and a deteriorating economy because its value tends to hold up better than other assets. As a result, demand for gold tends to wane when investors become more optimistic about the economy.
Gold for August delivery inched up $1.50 to $954.80 an ounce on the New York Mercantile Exchange.
Other precious metals also made small moves. September silver rose 7 cents to $13.77 an ounce, while July platinum rose $11 to $1,182.50 an ounce.
September copper futures slipped less than a penny to $2.5240 a pound. Aluminum prices rose 2.2 percent.
Energy prices rose on the Nymex, buoyed by the rally in stocks and the hope that the increase in home sales suggests demand for energy could soon pick up.
Light, sweet crude for September delivery added $1.76 to settle at $67.16 a barrel.
In other Nymex trading, gasoline futures rose 7.49 cents to $1.9132 a gallon, while heating oil futures gained 5.32 cents to $1.7644 a gallon.
On the Chicago Board of Trade, corn prices surged 6.2 percent, rallying off of their lowest point since early December. The jump came after the U.S. Department of Agriculture said it plans to ask growers in seven states to update their estimates on how many acres of corn have been planted due to “variable weather conditions.”
That raised hopes that the USDA might cut its acreage estimate in its August 12 crop report, said John Sanow, a market analyst with DTN in Omaha, and the potential decrease in supply boosted prices. The jump in stocks also stoked buying, he said.
September corn rose 19 cents to $3.27 a bushel.
Other grains followed corn higher.
September wheat futures rose 9.75 cents to $5.3175 a bushel, while November soybeans gained 24 cents to $9.32 a bushel.
Soybeans also got a boost from word that China was unable to sell some reserves of soybeans because the prices were too high, Sanow said. Investors had been worried that the sale of the soybeans would cut into U.S. exports.
Prices for cocoa, cotton and coffee also rose.
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