BLBG: Gold Little Changed After Tumble as Asia, U.S. Stocks Rebound
Gold was little changed after slumping the most in six weeks yesterday as U.S. stocks advanced after Federal Reserve Chairman Ben S. Bernanke’s statement that banks need not be nationalized.
Gold traded at $964.55 an ounce, down 4.1 percent from its 11-month high of $1,006.29 on Feb. 20. Asian shares rallied from a five-year low, reducing investor concern that the value of financial assets may be eroded. Asian selling and European buying are keeping gold in a tight range, said John Reade, a metals strategist at UBS AG in London.
“The surge in physical and quasi-physical gold investment over the past six months has been very much a U.S. and European phenomenon,” he wrote in a report. “Asian and Middle Eastern holders of gold are selling and are keeping the scrap market very well supplied.”
Total gold holdings of eight exchange-traded funds tracked by UBS fell to 47.63 million ounces Feb. 23 from 47.64 million Feb. 20, the first decline this month, Reade noted, saying the trend is “worth watching closely” as “we will not ignore a halt in inflows for very long before becoming very wary.”
Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, stood unchanged for a fourth day at 1,028.98 metric tons yesterday, according to figures on the company’s Web site.
Investor Confidence
Investors have been attracted to precious metals as confidence waned in financial assets. The MSCI Asia Pacific Index, which fell 9 percent in the past two weeks, climbed as much as 1.7 percent today after closing at a five-year low yesterday. The gauge traded at 75.21 at 11:26 a.m. in Singapore.
The MSCI World Index advanced for a second day, and traded 0.4 percent higher at 770.89.
Silver was up 1 percent at $13.8713 an ounce at 11:30 a.m. Singapore time. The precious metal is the best performer on the UBS Bloomberg Commodity Constant Maturity Index of 26 contracts, gaining 22 percent this year.
Platinum advanced 0.9 percent to $1,053.75 an ounce at 11:29 a.m. Palladium dropped 0.5 percent to $199.50 an ounce.
