BLBG:Gold Poised to Advance After Decline Prompts Purchases
Gold was set to gain for the first time in three days in New York as some investors bought bullion after prices dropped the most in three months yesterday. Silver climbed.
Gold has risen 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. The precious metal retreated 3.1 percent since climbing to $1,798.10 an ounce on Oct. 5, the highest in almost 11 months, 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 (8301) 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. (ANZ) 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.”
The metal for December delivery was 0.3 percent higher at $1,742 an ounce on the Comex in New York by 7:23 a.m. The metal tumbled as much as 1.7 percent yesterday, the most since July, to a one-month low of $1,729.70. Gold for immediate delivery gained 0.2 percent to $1,740.65 an ounce in London.
Gold at the morning “fixing,” used by some mining companies to sell output, gained to $1,737.50 in London from $1,736 yesterday afternoon.
Consumer prices in China rose 1.9 percent in September from a year earlier, close to 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.
Dollar Weakens
Bullion also gained as the dollar weakened. The U.S. Dollar Index, a gauge against six counterparts, fell 0.5 percent today. Gold usually moves inversely to the greenback.
Holdings in gold-backed exchange-traded products declined for a second day yesterday, falling 0.2 percent, after climbing to a record 2,582.984 metric tons on Oct. 11, data compiled by Bloomberg show.
Silver for December delivery climbed 0.5 percent to $32.90 an ounce. Platinum for January delivery gained 0.6 percent to $1,642.80 an ounce, while palladium for December gained 1.1 percent to $639.35 an ounce.
To contact the reporters on this story: Glenys Sim in Singapore at gsim4@bloomberg.net; John Deane in London at jdeane3@bloomberg.net.
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.
