Bloomberg) -- Gold climbed to the highest in a week after Chinese buyers returned from holidays and investors speculated that the Federal Reserve will keep interest rates low. Platinum rose the most this month.
Volumes for the Shanghai Gold Exchange’s benchmark spot contract more than doubled on Wednesday from Feb. 17 as investors in China, the world’s second-biggest gold consumer, returned from the week-long Lunar New Year holiday. The country’s gold imports from Hong Kong rose in January as jewelry demand increased before the break.
Fed Chair Janet Yellen, testifying to a House committee on Wednesday, reiterated that the central bank’s timetable for raising interest rates is flexible. Higher interest rates curb gold’s appeal because the metal generally gives returns only through price gains.
“We have some pent-up demand in China being released as they return from holiday, helping the gold market back on its feet,” Ole Hansen, a strategist at Saxo Bank A/S, said by phone from Copenhagen. “Yellen was also less hawkish than many had expected, which removed some selling pressure.”
Gold for immediate delivery rose as much as 1.2 percent to $1,220.03 an ounce, the highest since Feb. 19, before trading at $1,218.53 at 11:04 a.m. in London, according to Bloomberg generic pricing. The metal fell 5.1 percent this month, while it’s still 2.9 percent higher this year. Bullion for April delivery rose 1.4 percent on the Comex in New York.
China’s net gold imports from Hong Kong totaled 71.6 metric tons in January, up from 58.8 tons in December, according to data compiled by Bloomberg from figures released Thursday by the Hong Kong Census and Statistics Department.
Data Thursday may show U.S. consumer prices dropped in January, according to economists’ estimates compiled by Bloomberg. Yellen said the central bank will need to be “reasonably confident” inflation is rising back toward its goal before starting to raise rates.
Platinum climbed as much as 1.8 percent, the most since Jan. 15, to $1,192.63 an ounce. It later traded at $1,189.88, paring the monthly decline to 4.2 percent. Impala Platinum Holdings Ltd., the world’s second-largest producer of the metal, will sell mines, close shafts and reduce capital spending, as it expects prices to remain low until the second half of 2016, it said in a statement on Thursday. The metal retreated 1.5 percent this year after falling 12 percent in 2014.
Silver for immediate delivery added 1.8 percent to $16.8655 an ounce, gaining for a second day. It fell 2.2 percent in February. Palladium advanced 0.3 percent to $811.17 an ounce, and touched $815, the highest since Jan. 14. The metal rose 5.1 percent this month.
January 11, 2016