BGBL: Gold Advances After Chinese Data, Monthly Decline Stoke Investment Demand
Gold advanced on demand from investors seeking to preserve their wealth after China reported the slowest manufacturing growth in 17 months, reviving concern that the global economic recovery may slow.
Gold for immediate delivery rose as much as 0.3 percent to $1,184.05 an ounce before trading little changed at $1,182.68 at 12:12 p.m. in Singapore. The metal declined 4.9 percent in July, the biggest monthly drop this year. December-delivery futures were little changed at $1,183.70.
“Gold may continue to edge up on follow-through strength after Friday’s surge,” said Ong Yi Ling, Singapore-based investment analyst with Phillips Futures Pte Ltd. “Investors will remain concerned that the pace of the economic recovery may slow, fueling demand for gold.”
The Purchasing Managers’ Index in China fell to 51.2 in July from 52.1 in June, the Federation of Logistics and Purchasing said yesterday. U.S. unemployment probably climbed in July, raising the risk that American households will keep a lid on spending, economists said before a report this week.
“Following a series of gloomy economic data, rising economic uncertainty could revive haven demand,” said Hwang Il Doo, a Seoul-based senior trader at KEB Futures Co., predicting that the metal may advance to as much as $1,200 an ounce.
Nine of 22 traders, investors and analysts surveyed by Bloomberg, or 41 percent, said bullion will rise this week on speculation recent price falls will spur investment and physical demand. Eight forecast lower prices and five were neutral.
Gold has gained 7.8 percent this year and is set for a 10th annual advance, the longest winning streak since at least 1920, as investors sought protection against Europe’s financial turmoil, weaker currencies and concern there may be a double- dip recession.
Silver for immediate delivery increased 0.8 percent to $18.065 an ounce, platinum advanced 1 percent to $1,587.95 an ounce, while palladium was little changed at $497.25 an ounce.
To contact the reporter on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net
