BLBG:Gold Rallies To A 16-Week High As Fed May Add Stimulus
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.
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, data tracked by Bloomberg showed. The 200- day average is an important technical level and climb above it may have spurred more buying, Commerzbank AG said today.
“Investment demand is in the driver seat and the technicals are looking very positive,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. “Gold is again in the investor focus now that we have potential trigger events coming up, which could indicate more global monetary stimulus.”
Gold rose 0.5 percent to $1,662.85 an ounce by 11:14 a.m. in London. It rallied to $1,667.15 earlier today, the most expensive since May 1. December-delivery bullion climbed 1.5 percent to $1,665 an ounce on the Comex in New York.
London-traded bullion gained for a seventh day today to match a streak in June and is 6.3 percent higher for the year. Gold closed at $1,654.65 yesterday, above the 200-day moving average for the first time since March, signaling more gains. The average is now at $1,643.15.
‘Bull’ Mode
“The gold market now seems to be in bull mode and any friendly news is gratefully received,” David Govett, global head of precious metals at Marex Spectron Group Ltd., said in a report today. “It is election year and the pressure is on for a short-term fix, making the possibility ever more likely,” he wrote, referring to further so-called quantitative easing in the U.S.
Gold at the morning “fixing,” used by some mining companies to sell output, rose to $1,662.50 an ounce in London from $1,642 yesterday afternoon.
Platinum advanced as much as 1.7 percent to $1,561.50 an ounce, the highest level since May 3, before trading at $1,544.88. 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 workers made demands directly to the company on Aug. 17.
Spot silver climbed 2 percent to $30.445 an ounce, after earlier reaching $30.575 an ounce, the highest level since May 3. Palladium gained 0.5 percent to $635.03 an ounce.
To contact the reporters on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net; Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
