BS: Gold Advances to a 1-Month High as Euro Rallies, Demand Gains
Jan. 19 (Bloomberg) -- Gold advanced to the highest level in more than a month in London as the euro rallied after France and Spain sold debt and amid signs physical demand is gaining. Palladium and platinum also jumped.
The euro rose to a two-week high and most European stocks gained after French borrowing costs dropped at an auction and Spain sold more bonds than its planned target. Commodities advanced amid signs China will relax credit controls. Demand for physical gold in India yesterday was the strongest UBS AG has seen this year, the bank said in a report.
“Gold is pulled upward by the firm equity markets and rising commodity prices,” said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt. “In addition, the SPDR Gold Trust saw its first inflows since the end of November, which might be a signal that physical demand among private investors is picking up again.”
Gold for immediate delivery gained 0.3 percent to $1,664.35 an ounce by 11:21 a.m. in London, after rising earlier today as much as 0.6 percent to $1,669.97, the highest price since Dec. 13. Gold for February delivery climbed 0.3 percent to $1,664.50 on the Comex in New York.
The dollar fell as much as 0.4 percent against the euro after sliding 1 percent yesterday, the most since Nov. 11, after the International Monetary Fund said it plans to expand its lending resources to counter Europe’s debt crisis. Bullion typically moves counter to the greenback.
“There is some impact from the euro strengthening,” said John Meyer, an analyst at Fairfax IS in London. “With countries looking to print money for the IMF, gold gains in relative value against paper money.”
SPDR Trust
Gold holdings in the SPDR Gold Trust, the biggest exchange- traded product backed by bullion, rose 0.1 percent to 40.37 million ounces on Jan. 17, the first gain since Nov. 30. Global holdings in exchange-traded products backed by bullion slipped 0.2 percent to 2,354.94 metric tons yesterday, data compiled by Bloomberg show.
Palladium advanced as much as 1.4 percent to $676.50 an ounce, the highest price since Dec. 12, while platinum climbed as much as 1.1 percent to $1,540.25 an ounce, the highest level since Dec. 5. Silver gained as much as 1.1 percent to $30.875 an ounce, the highest level since Dec. 14.
--With assistance from Glenys Sim in Singapore. Editors: John Deane, Claudia Carpenter
To contact the reporter on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
