BLBG:Gold May Extend Gain as U.S. Growth Offsets Weaker India Demand
Gold may advance for a third day as better-than-expected U.S. economic data weakened demand for the dollar as a haven, tempering the impact of slower consumption in India, the largest buyer, as jewelers extended a strike.
Spot gold traded at $1,679.73 at 2:43 p.m. in Singapore, after rising as much as 0.2 percent earlier. Bullion climbed 1 percent in the past two days as the dollar fell 0.4 percent against a six-currency basket. The U.S. currency was lower against the euro today before data forecast to show U.S. factory orders rose the most in three months. June-delivery gold was little changed at $1,680.30 on the Comex in New York.
U.S. manufacturing grew at a faster pace in March, adding to signs the world’s biggest economy is improving and helping Asian stocks extend a global rally. The Institute for Supply Management’s factory index climbed to 53.4 from 52.4 in February, a report showed yesterday. Readings above 50 signal growth.
“Gold prices were bolstered by a rise in risk assets,” James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note. “If gold prices can trade higher in a climate of poor Indian demand, then either other emerging-market demand is increasing or investment demand is sufficient to offset the drop off in Indian consumption.”
Jewelers in India today extended a strike for an 18th day to protest a levy on non-branded ornaments, the All India Gems & Jewellery Trade Federation said. While Indian demand last year was the largest on an annual basis, it may be surpassed by China this year, according to the World Gold Council.
Indian bullion imports may have been about 15 to 20 metric tons in March, from 75 to 80 tons a year earlier, the Bombay Bullion Association said yesterday. Second-quarter purchases may fall to 150 tons, from 250 tons a year earlier.
Cash silver increased as much as 0.5 percent to $33.1275 an ounce, and last traded at $33.0325. It climbed to $33.23 an ounce yesterday, the highest price since March 14.
Spot platinum gained for a third day, adding as much as 1.1 percent to a two-week high of $1,669 an ounce, before trading at $1,667.13. Palladium rose 1 percent to $662.38 an ounce.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
