BLBG: Gold Gains as Drop Below $1,600 Spurs Purchases, Offsetting Dollar’s Climb
Gold climbed, trimming the first quarterly decline since 2008, as the recent drop to the lowest level in almost three months lured buyers, tempering the effect of a stronger dollar.
Immediate-delivery bullion rose as much as 0.5 percent to $1,601.70 an ounce, and traded at $1,599.20 at 2:43 p.m. in Singapore. The metal fell 0.3 yesterday and 6.6 percent last week as the dollar rallied against the euro. The February- delivery contract climbed 0.3 percent to $1,601.40 on the Comex.
“Gold below $1,600 is very attractive to investors who still believe in the longer-term uptrend,” said Yang Shandan, senior trader at Cinda Futures Co., rated second in a Futures Daily and Securities Times poll of China gold analysts. “The dollar will remain a key driver of near term prices.”
Spot gold tumbled to $1,560.97 on Dec. 15, the lowest price since Sept. 26, and 19 percent below the Sept. 6 record of $1,921.15. While it is 13 percent higher this year, the metal has lost 1.5 percent this quarter.
The dollar traded near an 11-month high against the euro after European Central Bank President Mario Draghi said that substantial risks to the economy remain, and before a German report that’s forecast to show deteriorating business confidence. The U.S. currency advanced against most major counterparts as yesterday’s announcement of the death of North Korean leader Kim Jong Il raised concern that geopolitical risk in Asia may climb.
Holdings in bullion-backed exchange-traded funds, which reached an all-time high of 2,360.810 metric tons on Dec. 14, fell for a third day to 2,344.138 tons yesterday, data compiled by Bloomberg show.
Spot silver rose 0.7 percent to $29.0163 an ounce, after falling 0.4 percent earlier and 3.1 percent yesterday. The price has retreated 6.2 percent this year.
Cash palladium advanced 0.7 percent to $613 an ounce, trimming this year’s decline to 24 percent. Cash platinum climbed 0.4 percent to $1,417.25 an ounce, 20 percent lower in 2011.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
