BLBG:Gold Climbs Above $1,400 as Dollar Drops With Stocks, SPDR Gains
Gold rose to a one-week high, paring a second monthly decline, as the dollar and stocks retreated while holdings in the largest bullion-backed exchange-traded product expanded. Silver, platinum and palladium advanced.
Spot gold gained as much as 1.3 percent to $1,411.27 an ounce, the most expensive since May 22, and was at $1,408.70 at 2:23 p.m. Prices are still down 4.6 percent this month on speculation that the U.S. Federal Reserve may reduce stimulus as the world’s largest economy recovers.
Gold has lost 16 percent this year, tumbling into a bear market last month, as the Dollar Index strengthened 4.6 percent while the MSCI All-Country World Index rallied 9 percent. The dollar fell for a second day against a six-currency basket today and stocks dropped. Assets in the SPDR Gold Trust, the biggest bullion-backed ETP, expanded yesterday for the first time since May 9, according to data on the company’s website.
“We see a bit of safe-haven trade coming in,” said Yang Shandan, a senior trader at Cinda Futures Co., a unit of one of four funds in China created to buy bad debt from banks. “Physical buyers have helped to limit declines but they have also become more price-sensitive and tend to stay on the sidelines near $1,400.”
The volume for the Shanghai Gold Exchange’s benchmark cash contract climbed to 19,599 kilograms yesterday from 15,641 kilograms on May 28. Cash bullion of 99.99 percent purity jumped 1.1 percent to 280.67 yuan a gram ($1,424.28 an ounce).
Gold Futures
Bullion for August delivery added as much as 1.3 percent to $1,410.40 an ounce on the Comex in New York, also the highest level since May 22, before trading at $1,409.50. Futures are set for a second monthly decline as total holdings in ETPs tumbled to the lowest level since June 2011, shrinking 5.4 percent this month, according to data compiled by Bloomberg.
Cash silver gained 0.5 percent to $22.595 an ounce, paring a fourth monthly drop. Platinum rose 0.4 percent to $1,460.05 an ounce, narrowing a fourth monthly loss. Palladium advanced 0.4 percent to $751.80 an ounce, heading for a monthly advance.
Holdings in platinum-backed ETPs, up 35 percent this year, reached a record 63.12 tons yesterday, according to data compiled by Bloomberg. Assets in palladium products gained 15 percent this year to 66.2 tons.
Platinum will end the year at $1,690 and palladium will climb to $800, according to the medians of 15 analyst estimates compiled by Bloomberg earlier this month. Both metals are mainly used in car autocatalysts.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: Jake Lloyd-Smith at jlloydsmith@bloomberg.net
