BLBG:Gold Trades Below Two-Month High as Rally Spurs Investor Sales
Gold traded below a two-month high in London on speculation some investors may sell the metal after prices rallied on increased physical demand. Silver reached a three-month high.
Gold fell 18 percent this year as some investors lost faith in the metal as a store of value, wiping $55.6 billion from the value of bullion-backed exchange-traded products. Gold is heading for a second straight monthly gain as this year’s slump spurred purchases of jewelry and coins, particularly in Asia. Global ETP holdings had the first weekly gain since February, increasing from a three-year low.
“We saw a little bit of profit taking,” Afshin Nabavi, a senior vice president at bullion refiner MKS (Switzerland) SA in Geneva, said today by phone. “Physical demand is a little bit slower than last week because of the higher price level, but there is still some demand.”
Gold for immediate delivery lost 0.1 percent to $1,375.41 an ounce by 10:06 a.m. in London. Prices reached $1,384.55, the highest since June 18. Bullion for December delivery was up 0.3 percent at $1,374.50 on the Comex in New York. Futures trading volume was 26 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed.
Bullion may climb to $1,450 an ounce by the end of the year on rising physical demand across Asia, according to the median estimate of a Bloomberg survey of 11 traders, jewelers and analysts at the India Gold Convention in Jaipur on Aug. 16-17. Silver rallied for eight days through Aug. 16 in the best run since January.
ETP Holdings
Gold ETP holdings rose 1 metric ton to 1,950.5 tons on Aug. 16, capping a 2.2-ton weekly gain, data compiled by Bloomberg show. Assets are down 26 percent this year as prices dropped on speculation that the U.S. Federal Reserve may taper asset purchases that helped gold cap a 12-year bull run last year.
Silver for immediate delivery reached $23.6227 an ounce, the highest since May 14, and was last up 0.2 percent at $23.309. It jumped 13 percent last week, the most since September 2008. Assets in silver-backed ETPs reached a record 19,967.8 tons on Aug. 16, data compiled by Bloomberg show.
Palladium lost 0.6 percent to $758.25 an ounce. Platinum declined 0.5 percent to $1,517.30 an ounce, after capping a sixth weekly increase last week, the longest run since February 2012.
To contact the reporter 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
