BLBG:Gold Advances as ETP Holdings Expand to Record, Dollar Declines
Gold gained for the first time in three days, climbing alongside other commodities as the dollar weakened and investors boosted holdings in exchange-traded products to a record.
Spot gold advanced as much as 0.6 percent to $1,723.70 an ounce and traded at $1,722.30 at 12:15 p.m. in Singapore. The metal slumped 1 percent last week as the dollar strengthened for a fourth week against a six-currency basket in the best run since June. Holdings in ETPs backed by bullion rose to 2,603.692 metric tons on Nov. 16, data compiled by Bloomberg show.
President Barack Obama expressed confidence that he and Congress would reach a budget agreement needed to avert the so- called fiscal cliff, a combination of spending cuts and tax increases scheduled to take effect in January. This weighed on the dollar and helped send oil and copper higher today.
“Investment demand has been resilient despite lackluster price performance and that’s been helping to keep gold above $1,700,” said Sun Yonggang, macroeconomic strategist at Everbright Futures Co., a unit of one of China’s largest state- owned investment companies. “In the short term, developments in the U.S. and Europe will continue to determine direction of the dollar and thus gold.”
Gold has rallied 10 percent this year as central banks including the U.S. Federal Reserve took steps to shield their economies hurt by Europe’s crisis. The Bank of Japan holds a meeting today amid speculation of further easing. The U.S. Mint has sold 56,000 ounces of gold coins in November, according to data on the Mint’s website. At that pace, total sales this month would be 106,909 ounces, up 161 percent from a year earlier.
Comex Gold
Gold for December delivery rose 0.4 percent to $1,722.10 an ounce on the Comex. Money managers increased their net-long positions in Comex futures and options for the first time in five weeks, adding 7.7 percent to 140,162 contracts in the week to Nov. 13, Commodity Futures Trading Commission data show.
CME Group Inc. last week cut the amount that speculators must keep on deposit for an initial account in gold futures on the Comex to $7,425 per contract from $9,113. The maintenance margin was held at $6,750. The change is effective after the close of business on Nov. 20.
Cash silver rose as much as 1.1 percent to $32.6688 an ounce before trading at $32.585. Spot platinum climbed 0.5 percent to $1,567.25 an ounce, after falling 1.7 percent in the last two days. Palladium gained 0.7 percent to $632 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
