BLBG:Gold Set to Trim Monthly Loss as Holdings Climb, Dollar Weakens
Gold is poised to pare its first monthly loss since May as investor holdings in bullion-backed exchange-traded products increased to a record and after the dollar weakened. Silver and palladium advanced.
Gold for immediate delivery rose as much as 0.2 percent to $1,713.12 an ounce and was at $1,712.03 at 3:09 p.m. in Singapore. Prices are down 3.4 percent this month after climbing 4.7 percent in September as central banks from Europe to China to the U.S. pledged to do more to stimulate their economies.
Holdings in ETPs rose to 2,587.92 metric tons yesterday, data tracked by Bloomberg show. The Dollar Index (DXY) was little changed after dropping the most in almost two weeks yesterday amid speculation damage from Atlantic storm Sandy will be less severe than anticipated. Gold rose 70 percent as the Federal Reserve bought $2.3 trillion of debt in two rounds of quantitative easing, or QE, from December 2008 through June 2011.
A “weaker dollar will support prices,” said Nick Trevethan, senior commodities strategist at Australian & New Zealand Banking Group Ltd. in Singapore. “The market got a little ahead of itself with expectations for QE and overshot to the upside. It is back down to levels where perhaps we ought to be.”
U.S. equity markets will resume trading today after the longest weather-related shutdown in more than a century, according to statements by NYSE Euronext, Nasdaq OMX Group Inc. and Bats Global Markets Inc.
Volumes Drop
Bullion for December delivery was little changed at $1,713.10 an ounce on the Comex in New York. Aggregate volumes fell a second day to 58,186 contracts yesterday, less than half the volume on Oct. 26, according to data compiled by Bloomberg.
The Fed said Oct. 24 it will maintain $40 billion in monthly purchases of mortgage debt and probably hold interest rates near zero until mid-2015. The European Central Bank has said it is ready to buy bonds of indebted nations and China announced plans to boost infrastructure spending.
Japan’s central bank yesterday said it will offer unlimited loans at low interest rates to lenders to try to boost credit demand. The move came alongside an 11 trillion yen ($138 billion) expansion of the central bank’s asset-purchase program.
Gold of 99.99 percent purity on the Shanghai Gold Exchange gained as much as 0.5 percent to 346 yuan a gram ($1,724.38 an ounce) before trading little changed at 344.44 yuan.
Spot silver gained as much as 0.6 percent to $31.9538 an ounce and traded at $31.92. Prices are down 7.6 percent this month, the first drop since June.
Cash platinum was little changed at $1,553.86 an ounce, down 6.5 percent for the month. Palladium rose 0.6 percent to $600.50 an ounce, heading for a 6 percent decline in October.
To contact the reporter for this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
