Gold climbed toward a one-month high in London, extending a second consecutive weekly advance, on speculation Japan will increase stimulus. Silver was set for the longest rally in a year. Bank of Japan (8301) officials started a two-day policy meeting today. The nation’s currency had dropped to the lowest since June 2010 versus the dollar on speculation the BOJ, under pressure from the government of new Prime Minister Shinzo Abe, will boost stimulus to lift the economy out of recession. “The BOJ introducing fresh stimulus would be positive for precious metals,� analysts at Mumbai, India-based AnandRathi Commodities Ltd. said today in a report. “The economic calendar from the U.S. is relatively light this week. Movement in bullion may stay confined to a narrow band.� Gold for immediate delivery rose 0.3 percent to $1,689.87 an ounce by 9:27 a.m. in London. Prices reached a four-week high of $1,696.28 on Jan. 17 and gained 1.3 percent last week. Gold for February delivery was up 0.1 percent at $1,689.30 on the Comex in New York. Bullion futures volume was 29 percent below the average for the past 100 days at this time of day, according to data on Bloomberg. Precious-metals trading will probably be subdued today as U.S. financial markets are shut for a public holiday, UBS AG wrote in a report. Goldman Sachs Group Inc. expects gold to climb toward $1,825 over the next three months as U.S. lawmakers tackle the debt ceiling amid slowing growth, while restating a forecast for weaker prices in the second half as the world’s largest economy rebounds, the bank’s analysts wrote in a Jan. 18 report. Debt Limit Since 1960, Congress has raised or revised the debt limit 79 times, including 49 times under Republican presidents, according to the Treasury Department. Silver for immediate delivery added 0.2 percent to $31.9375 an ounce, after reaching $32.1225 on Jan. 18, the highest since Dec. 18. The metal is up for a sixth day, the longest rally since January 2012. The U.S. Mint said last week that it sold out of 2013 American Eagle silver coins and will resume sales on or about the week of Jan. 28, when inventory is replenished. Holdings in silver-backed exchange-traded products are at a record, data compiled by Bloomberg show. Palladium fell 0.5 percent to $718.25 an ounce, after reaching a 16-month high of $732.50 on Jan. 18. Platinum was up 0.4 percent at $1,675.97 an ounce. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

Source