BLBG:Gold Climbs Above $1,600 As Economic Data Lift Easing Prospects
Gold advanced, trading above $1,600 an ounce, as global manufacturing data boosted prospects of further stimulus by central banks from the U.S. to China to spur growth, increasing demand for bullion as a haven.
Spot gold rose as much as 0.6 percent to $1,606.72 an ounce and was at $1,604.57 by 2:38 p.m. in Singapore. August-delivery bullion gained as much as 0.6 percent to $1,607 an ounce on the Comex in New York, before trading at $1,605.10.
China should cut banks’ reserve-requirement ratios, the China Securities Journal said today in a front-page commentary, a day after data showed output expanded at the weakest pace in seven months. A separate report showed manufacturing in the U.S. unexpectedly shrank in June, which may encourage more accommodative policies from the Federal Reserve, Princeton University economist Alan Blinder said in a Bloomberg Television interview. European Central Bank officials are expected to cut their main interest rate to a record low at their July 5 meeting.
“Gold lacks direction, but sees a stronger quarter ahead as spotlight returns to the U.S. economy,” Lynette Tan, an investment analyst at Phillip Futures Ltd., wrote in an e-mail today. “Gold prices have been sensitive to signs of economic weakness, which tend to increase the likelihood of monetary easing by the Federal Reserve.”
Cash gold last week capped its worst quarter since the three months to September 2008, as the Dollar Index rallied 3.3 percent, after the Fed didn’t buy more debt and instead extended a program of replacing short-term bonds with longer-term debt. The central bank bought $2.3 trillion of debt in two rounds of quantitative easing, or QE, from December 2008 to June 2011 and gold almost doubled in that time.
Spot silver climbed as much as 1.5 percent to $27.90 an ounce, before trading at $27.78. Cash platinum advanced as much as 0.9 percent to $1,468.25 an ounce and was last at $1,465.25, erasing an earlier 0.6 percent decline. Palladium rose as much as 1 percent to $584.25 an ounce, and last traded at $581.20, eliminating a 0.6 percent drop.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: Jake Lloyd-Smith at jlloydsmith@bloomberg.net
