BLBG:Gold Gains as Drop to 7-Week Low Spurs Buying; ETPs Set Record
Gold rebounded after a drop to the lowest price in almost seven weeks spurred purchases and as investors boosted holdings in exchange-traded products to a record. Silver, platinum and palladium advanced.
Spot gold climbed as much as 0.7 percent to $1,714.07 an ounce and was at $1,711.03 at 3:06 p.m. in Singapore. The metal slumped to $1,699 yesterday, dropping below $1,700 for the first time since Sept. 7, as the European Central Bank warned about the risk of deflation in some countries.
Assets held in exchange-traded products have expanded 9.7 percent this year as central banks from the U.S. to Europe and Asia took steps to bolster their economies. The Federal Reserve yesterday maintained its $40 billion monthly purchases of mortgage-backed securities and repeated that interest rates are likely to stay near zero until at least mid-2015.
“As long as monetary policy remains accommodative, investors are still interested to buy gold,” said Wang Xiaoli, chief investment strategist at CITICS Futures Co., a unit of China’s biggest listed brokerage. “The Fed’s actions were within expectations and already priced into the market.”
Gold for December delivery rose 0.6 percent to $1,711.90 an ounce on the Comex in New York after dropping to $1,698.70 yesterday. Bullion also rose as the dollar weakened for a second day against a six-currency basket including the euro. Gold- backed ETP holdings totaled 2,584.464 metric tons yesterday, according to data compiled by Bloomberg.
Gold of 99.99 percent purity on the Shanghai Gold Exchange was little changed at 344.9 yuan a gram ($1,718.35 an ounce). Volumes for the benchmark cash contract dropped to a one-week low of 3,420 kilograms yesterday from 5,036 kilograms on Oct. 23, which was the highest since Sept. 28.
Cash silver rose for a second day, gaining as much as 1.2 percent to $32.1519 an ounce, before trading at $32.07. The metal earlier slumped to $31.5238, the lowest since Aug. 31.
Spot platinum climbed for the first time in six days, adding 1.1 percent to $1,577.24 an ounce. Palladium advanced 1.3 percent to $603.50 an ounce, snapping a five-day decline.
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
