Gold advanced to the highest level in 16 weeks after breaking above the 200-day moving average as the Federal Reserve signaled that it may add stimulus and investment holdings rose to a record. Platinum extended a rally. Spot gold gained for a seventh day to match a streak in June, rising as much as 0.6 percent to $1,665.31 an ounce, the most expensive since May 2. The metal traded at $1,663.50 at 2:11 p.m. in Singapore. Gold closed at $1,654.65 yesterday, above the 200-day moving average for the first time since March 26, signaling more gains. The average is now at $1,643.15. Minutes from the Federal Open Market Committee’s July 31- Aug. 1 meeting showed that “many members� believed more monetary accommodation would be needed unless the recovery picks up. Assets in gold-backed exchange-traded products expanded to 2,442.26 metric tons, according to data tracked by Bloomberg. The 200-day average is an important technical level as a climb above it may spur more buying, Commerzbank AG said yesterday. “The fact the market saw the minutes as more stimulus suggests more inflationary pressures,� said Jonathan Barratt, chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney. “It was a very good technical break and as long as we stay above $1,640, the market will be convinced it will head higher,� he said, referring to the moving average. December-delivery bullion climbed as much as 1.7 percent to $1,668.20 an ounce on the Comex in New York, the most expensive for most-active futures since May 1. The metal traded at $1,666.20, 6.3 percent higher this year. Mine Disruptions Platinum advanced as much as 1.7 percent to $1,561.50 an ounce, the highest level since May 3, and traded at $1,559.75. Prices are up for a sixth day, the best run since the period to Oct. 28, after violence in South Africa, the biggest supplier. Worker discontent at Lonmin Plc (LMI)’s Marikana complex in South Africa that led to 44 deaths spread to Royal Bafokeng Platinum Ltd. (RBP), whose operations were disrupted by miners yesterday demanding higher wages. Anglo American Plc (AAL)’s platinum unit, the world’s largest producer, said that workers made demands directly to the company on Aug. 17. Spot silver climbed as much as 2.5 percent to $30.575 an ounce, the highest level since May 3, and was at $30.485. Palladium gained as much as 1.1 percent to $638.80 an ounce, the highest price since June 15, and was at $638.50. To contact the reporter on this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

Source