Gold held below the highest in more than six weeks as investors weighed prospects for deflation spurred by tumbling energy prices against signs of rising demand. Palladium rose toward the highest level since September, while platinum advanced.
Bullion for immediate delivery rose and fell at least 0.3 percent, and traded at $1,223.64 an ounce at 2:37 p.m. in Singapore from $1,226.31 yesterday, according to Bloomberg generic pricing. The metal climbed on Dec. 9 to $1,238.32, the highest level since Oct. 23, then retreated yesterday as a slump in oil prices deepened deflation concerns.
Crude prices in New York and London have plunged to five-year lows and are more than 40 percent below their 2014 peaks in June, triggering losses in global stocks as shares of energy producers tumbled. Holdings in the SPDR Gold Trust posted the first back-to-back expansion since August, while volumes for the benchmark spot gold contract climbed to a three-week high in Shanghai. Federal Reserve policy makers meet next week to decide on monetary policy as the U.S. recovers.
“The slide in equity markets has swelled risk aversion, benefiting precious metals,” said Xia Yingying, a Hangzhou, China-based analyst at Nanhua Futures Co. “Gold has to contend with lower oil prices but the key risk remains the resumption of a dollar rally as investors wait for the Fed’s next move.”
The Bloomberg Dollar Spot Index was little changed after falling for the past three days. Fed officials gather Dec. 16-17 to debate the timing of the first interest-rate increase in since 2006 after ending a bond-buying program.
Gold for February delivery fell 0.4 percent to $1,224 an ounce on the Comex in New York after earlier rising 0.3 percent. Most-active futures dropped yesterday from a six-week high of $1,239 on Dec. 9.
Holdings in the SPDR climbed yesterday to 724.8 metric tons, the most since Nov. 10. Assets in the largest gold-backed exchange-traded product are still 9.2 percent lower this year as investors lost interest in bullion after the Fed ended its bond-buying program that failed to spur inflation.
In China, the world’s largest gold consumer, volumes for gold of 99.99 percent purity rose for a second day yesterday on the Shanghai Gold Exchange to 28,152 kilograms, the most since Nov. 18.
Silver for immediate delivery traded at $17.0722 an ounce from $17.0647 yesterday, when the metal climbed to $17.3205, the highest price since Oct. 29.
Spot platinum added 0.5 percent to $1,248.31 an ounce, after advancing on Dec. 9 to $1,256, the highest level since Oct. 30. The metal is heading for the first consecutive weekly increase since July.
Palladium gained 0.4 percent to $817.50 after rising yesterday to $822.25 an ounce, the highest since Sept. 24.
Source: www.bloomberg.com
January 11, 2016