BLBG:Gold Trades Near Six-Month Low on Signs of Economic Improvement
Gold traded little changed near a six-month low in London as investors weighed signs of economic improvement against stronger physical bullion demand, before the U.S. central bank releases minutes of its latest meeting.
The Federal Reserve will publish minutes of its Jan. 29-30 policy meeting today and Labor Department data on producer prices today and on consumer costs tomorrow will show inflation is in check, economists surveyed by Bloomberg said. Global equities reached the highest since June 2008 today. There’s “strong” physical gold-buying interest from China, Australia & New Zealand Banking Group Ltd. said in a report.
“Bullion’s safe-haven properties as well as its traditional use in inflation hedges are irrelevant at this point,” Andrey Kryuchenkov, an analyst at VTB Capital in London, wrote in a report. “The market’s attention is set to turn to the Federal Open Market Committee’s January minutes.”
Gold for immediate delivery was little changed at $1,605.29 an ounce by 9:24 a.m. in London. The five-day drop through yesterday was the longest run since January 2011, and prices reached $1,598.23 on Feb. 15, the lowest since Aug. 15. Futures for April delivery were little changed at $1,604.60 on the Comex in New York.
Futures trading volume was 1 percent below the average in the past 100 days for this time of day. Asian markets were closed last week for Lunar New Year holidays. China was the second-largest bullion buyer last year, after India, the London- based World Gold Council estimates.
The Fed said Jan. 30 it would continue to buy $85 billion of Treasuries and mortgage-backed securities a month to support U.S. economic growth. Minutes of the FOMC’s Dec. 11-12 meeting showed members had split between wanting to finish bond purchases in the middle or at the end of the year.
Silver for immediate delivery gained 0.4 percent to $29.5775 an ounce in London. Palladium added 0.1 percent to $765.05 an ounce. Platinum fell 0.6 percent to $1,684.85 an ounce.
To contact the reporter for this story: Nicholas Larkin in London at nlarkin1@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
