BLBG: Gold Trades Below Two-Week High Amid Signs of Physical Buying
Gold was little changed below a two-week high as investors weighed the dollar’s advance against signs of more physical buying.
The Bloomberg Dollar Spot Index traded near a five-year high after a report showed Japan’s economy unexpectedly sank into a recession. Physical buying will probably support gold prices through November, Barclays Plc wrote in a report today.
Bearish wagers on gold futures and options by hedge funds are near a record, according to U.S. government data. Trading today on the Shanghai Gold Exchange’s benchmark bullion spot contract was the highest since April 2013. Bullion is down 1.3 percent this year.
“The market is fundamentally weak,” David Govett, head of precious metals at broker Marex Spectron Group in London, said in a note. “I don’t believe this is the beginning of a sustained up move, but one has to be very careful when the scales are tipped too heavily on one side.”
Gold for immediate delivery lost 0.2 percent to $1,186.22 an ounce by 9:21 a.m. in London, according to Bloomberg generic pricing. It reached $1,194.38 earlier today, the highest since Oct. 31. Gold for December delivery was unchanged at $1,185.60 on the Comex in New York.
Futures trading volume was more than double the average for the past 100 days for this time of day, data compiled by Bloomberg show.
Holdings in gold-backed exchange-traded products fell 0.7 metric ton to 1,617.4 tons on Nov. 14, the lowest since May 2009, data compiled by Bloomberg show. Billionaire hedge fund manager John Paulson kept his stake in the SPDR Gold Trust, the largest gold ETP, unchanged in the latest quarter, a Nov. 14 government filing showed.
Silver for immediate delivery fell 1 percent to $16.1395 an ounce in London, after reaching the highest since Oct. 31 earlier today. Palladium lost 0.4 percent to $763.35 an ounce. Platinum dropped 1 percent to $1,201.13 an ounce. It touched $1,178.75 on Nov. 14, the lowest since July 2009.
To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net Nicholas Larkin
