BLBG:Gold Advances for Third day Toward Highest Price Since Rout
Gold climbed for a third day toward the most expensive since April 15, when it completed its worst slump in three decades, as investors weighed rising physical sales against falling investment demand.
Bullion for immediate delivery rose as much as 0.6 percent to $1,479.08 an ounce, and was at $1,475.11 at 2:50 p.m. in Singapore. Gold climbed to $1,488.10 on May 3, the highest price since April 15, when the metal plunged 9.1 percent in the worst slide since 1983. Gold had its worst monthly loss since December 2011 in April after plunging into a bear market.
While prices have recovered from a two-year low on April 16 as coins and jewelry demand from the U.S. to China and the Middle East increased, they are 5.5 percent below the level that preceded the rout. Gold volumes for the benchmark spot contract on the Shanghai Gold Exchange have exceeded 320 metric tons since April 16, according to exchange data compiled by Bloomberg.
“Gold is stalling at the $1,480 to $1,500 level,” said Xiang Nan, an analyst at Citics Futures Co., a unit of China’s biggest listed brokerage. “While physical demand around the world has been robust, we need to see ETF redemptions slow down in order for the next leg higher.”
Buffett’s Position
Assets held by bullion-backed exchange-traded products fell to 2,262.148 metric tons on May 3, the least since October 2011, according to data compiled by Bloomberg. Billionaire investor Warren Buffett, the chairman and chief executive officer of Berkshire Hathaway Inc., said he wouldn’t buy gold after the slump even as Paul Singer’s Elliott Management Corp. and John Paulson’s Paulson & Co. are sticking with bets on the metal.
Gold for June delivery rose 0.7 percent to $1,474.50 an ounce on the Comex. Hedge funds and other large speculators raised their net-long position 19 percent to 54,762 futures and options as of April 30, U.S. Commodity Futures Trading Commission data show. Holdings of short contracts fell 9.2 percent, the most since March 19. A long position is a bet on higher prices, while a short position is the opposite.
Silver advanced as much as 1.4 percent to $24.451 an ounce, the highest level since April 30, and was at $24.199. Platinum was little changed at $1,500.05 an ounce after gaining as much as 0.5 percent to $1,507.25. Palladium fell 0.3 percent to $691.70 an ounce after touching $704.85 on May 3, the highest since April 15.
To contact the reporter for this story: Glenys Sim at gsim4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
