BLBG:Gold Climbs for Third Day as Dollar Weakens on Optimism Over Economic Data
Gold rose for a third day, climbing alongside other commodities including copper, as the dollar weakened before data forecast to show signs of economic recovery.
Spot gold gained as much as 0.4 percent to $1,658.45 an ounce and traded at $1,654.48 at 1:40 p.m. in Singapore. The metal climbed to $1,667.90 yesterday, the highest since Dec. 13 and an increase of 6.7 percent this year. February-delivery bullion was little changed at $1,655.20 on the Comex in New York.
The dollar dropped against most of its major counterparts before U.S. industrial production and homebuilder confidence data. It fell for a second day against the euro after a hedge- fund manager on a creditors’ committee for Greece said the country is nearing a deal on its debt. Greek Minister Prime Lucas Papademos will resume talks with private bondholders today.
“Safe-haven investments have flowed into the dollar rather than gold over the past few months, with gold being led by other commodities, especially the industrial metals,” Qu Ying, an analyst at Zhongzhou Futures Co., said from Shandong. “There isn’t much impetus to drive gold past the $1,550 to $1,700 range so you’ll get investors taking profits when prices climb and entering the market when they drop.”
Global holdings in exchange-traded products backed by the metal rose to a four-week high of 2,360.757 metric tons yesterday, according to data compiled by Bloomberg. A report yesterday showed manufacturing in the New York region expanded in January at the fastest pace in nine months, while German investor confidence advanced to the most on record in January, helping to send copper prices up for a third day today.
Indian Taxes
Cash gold earlier fell 0.4 percent amid concern demand in India, the world’s biggest consumer, may cool after import duties were raised. India raised the tax on imports of gold bars and coins to 2 percent while silver now attracts a 6 percent duty, the finance ministry said yesterday.
Overseas purchases of gold were taxed at 300 rupees ($5.9) per 10 grams and of silver at 1,500 rupees a kilogram previously. The increase means that gold importers may now pay about 540 rupees per 10 grams, said Prithviraj Kothari, president of the Bombay Bullion Association.
Imports by India were already poised to drop 48 percent in the first quarter as a decline in the rupee boosts prices and high borrowing costs cool demand, Kothari said on Jan. 3. Purchases declined to between 875 tons and 880 tons last year from 958 tons in 2010, according to the association.
Spot silver climbed for a third day, rising 0.4 percent to $30.1950 an ounce. Cash platinum fell for the first time in three days, dropping 0.4 percent to $1,516.13 an ounce. Immediate-delivery palladium rose for a fourth day, gaining 0.2 percent to $653.50 an ounce.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
