BLBG:Gold Snaps Three-Day Decline as Data Signals Extended Stimulus
Gold rebounded from a one-week low on speculation that stimulus by central banks around the world will be maintained as economic data signaled the global recovery may be losing momentum. Silver advanced for a second day.
Spot gold rose as much as 0.6 percent to $1,585.02 an ounce, and traded at $1,578.73 at 3 p.m. in Singapore, snapping a three-day loss. The metal dropped to $1,564.88 on March 1, the lowest price since Feb. 21, as a strengthening dollar helped to curb demand. Bullion fell for a fifth month in February, the longest run of declines since 1997, after investors cut exchange-traded products holdings by the most since April 2008.
China’s services industry expanded at the slowest in five months in February, according to a government report yesterday, after data last week showed manufacturing activity slowed to the weakest in five months. In the U.S., January personal income fell 3.6 percent, the most since January 1993, March 1 data showed. Gold rallied in the past 12 years as nations from the U.S. to China pledged more stimulus to bolster economic growth.
“The price of gold is likely to be influenced by monetary policy and currency movements,” Alexandra Knight, an economist at National Australia Bank Ltd., wrote in a note. “There have been indications that industrial activity has been mixed, which has seen prices become more volatile. ”
Gold for April delivery rose as much as 0.8 percent to $1,584.30 an ounce on the Comex in New York, and was at $1,577.60, also snapping three days of declines. The dollar was little changed against a six-currency basket today after gaining on March 1 to the highest level since Aug. 20.
Euro-area finance ministers meet in Brussels today to discuss issues including a bailout for Cyprus as Italy edges closer to a new election. Data March 8 may show U.S. employers added jobs in February even as lawmakers are at a budget impasse. In China, legislators begin an annual conference tomorrow.
Cash silver gained 0.2 percent to $28.645 an ounce, spot platinum was little changed at $1,572.75 an ounce, and palladium slipped 0.5 percent to $719.65 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
