BLBG:Gold Set To Gain As ETP Holdings Rise To Record On Stimulus Bets
Gold may climb for a second day on signs of increased investment demand and on speculation that central banks will take more steps to boost growth.
Spot gold was little changed at $1,617.40 an ounce by 11:40 a.m. in Singapore, after swinging between gains and losses. The metal climbed 1.3 percent yesterday to a two-week high. Assets held in exchange-traded products backed by bullion expanded to a record 2,412.422 metric tons yesterday, data compiled by Bloomberg showed.
“While gold has maintained its safe-haven status to an extent, it is exhibiting increasingly similar characteristics to other risk assets, like the industrial commodities,” Alexandra Knight, an economist at National Australia Bank Ltd. (NAB), wrote in a report today. “A steady U.S. dollar and emerging deflation worries have limited demand for gold recently.”
Manufacturing deteriorated from the U.S. to China, according to data this week, fueling speculation central banks will add to stimulus. That helped commodities rally to a five- week high yesterday. August-delivery bullion fell as much as 0.4 percent to $1,614.60 an ounce on the Comex in New York, and was last at $1,618.30, after a 1.5 percent gain yesterday. U.S. markets are closed today for the Independence Day holiday.
The Federal Reserve 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. Cash gold slumped 4.3 percent in the second quarter, the most 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.
Spot silver fell for the first time in four days, dropping as much as 0.6 percent to $28.1025 an ounce, before trading at $28.11. Cash platinum was little changed at $1,489.25 an ounce, paring an earlier decline of 0.4 percent. Palladium rose for a second day, adding as much as 0.6 percent to $603.75 an ounce, and was last at $602.75.
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
