BLBG:Gold Set to Gain for First Day in Three as Slump Spurs Purchases
Gold was poised to advance for the first time in three days as some investors made purchases after prices dropped the most in three months yesterday.
Spot gold was little changed at $1,738.55 an ounce at 2:05 p.m. in Singapore. The metal tumbled as much as 1.5 percent yesterday, the most since July, to a one-month low of $1,728.85. The metal for December delivery rose 0.2 percent to $1,740.50 an ounce on the Comex in New York.
Bullion rose 11 percent this year as central banks from the U.S. to Japan and China took steps to support growth hurt by Europe’s debt crisis. Gold retreated 3.2 percent since climbing to an 11-month high of $1,796.10 on Oct. 5, erasing gains made after the U.S. Federal Reserve announced a third round of debt- buying on Sept. 13. The European Central Bank held interest rates at a record low and the Bank of Japan kept an asset- purchase fund at 55 trillion yen ($697 billion) this month.
“The gold market experienced momentum-based selling but appears to have found a base around the $1,735 an ounce level,” Australia & New Zealand Banking Group Ltd. analysts led by Mark Pervan wrote in a report today. “Weaker inflation data from China likely pressured gold prices despite the more positive U.S. retail sales data.”
Consumer prices in China rose 1.9 percent in September from a year earlier, near the slowest pace in two years, the National Bureau of Statistics said yesterday. U.S. retail sales increased 1.1 percent in September, compared with the 0.8 percent rise forecast by economists, the Commerce Department said yesterday.
Holdings in gold-backed exchange-traded products declined for a second day yesterday after climbing to a record 2,582.984 metric tons on Oct. 11, data compiled by Bloomberg show.
Spot gold of 99.99 percent purity fell for a fifth day on the Shanghai Gold Exchange, dropping 0.4 percent to 351.20 yuan a gram ($1,743.22 an ounce). Volumes rose to a one-week high of 4,164 kilograms yesterday from 2,427 kilograms on Oct. 12.
Cash silver gained 0.5 percent to $32.88 an ounce, while spot platinum advanced 0.2 percent to $1,643.53 an ounce and palladium climbed 0.6 percent to $637.50 an ounce.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
