BLBG:Gold Climbs From 6-Month Low as Price Drop Spurs Buying
Gold rebounded from the biggest weekly drop since May in London on speculation that the slide to a six-month low will spur purchases.
The metal dropped 3.4 percent last week and holdings in gold-backed exchange-traded products fell the most since July in the period on growing confidence that the global economy is strengthening. Billionaire investor George Soros cut his gold ETP holdings last quarter, government filings showed last week. UBS AG said in a report today that its gold flows to India, the top buyer, were above average after the sell-off, and Morgan Stanley said it expects “bargain hunting” this week.
“With prices still relatively low, physical demand should pick up,” Morgan Stanley analysts including said in a report today. “Until central banks reverse and raise record-low rates, stop purchases of sovereign bonds, mortgage-backed securities and gold, prices will likely still clock positive quarter-on- quarter returns.”
Gold for immediate delivery added 0.2 percent to $1,613.67 an ounce by 9:47 a.m. in London. Prices slid to $1,598.23 on Feb. 15, the lowest since Aug. 15. Futures for April delivery were 0.2 percent higher at $1,613.20 on the Comex in New York.
U.S. financial markets will be shut today for a holiday. Futures trading volume was 38 percent higher than the average in the past 100 days for this time of day. Volume for gold of 99.99 percent purity on the Shanghai Gold Exchange exceeded 22,000 kilograms (22 metric tons) today for the first time ever, according to data tracked by Bloomberg. Markets in Asia were closed last week for the Lunar New Year holiday.
Holdings in gold ETPs fell 0.5 percent to 2,602.3 tons last week, and are now 1.1 percent below the Dec. 20 record, data compiled by Bloomberg show. Soros reduced his investment in the SPDR Gold Trust, the biggest fund backed by the metal, by 55 percent as of Dec. 31 from three months earlier. Paulson & Co., the largest investor, kept its stake unchanged, a filing showed.
Silver for immediate delivery rose 0.8 percent to $30.0387 an ounce, after reaching a six-week low of $29.6912 on Feb. 15. Palladium fell 0.6 percent to $753.91 an ounce. Platinum was up 0.3 percent at $1,686.70 an ounce.
To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
