BLBG:Gold Tops $1,700 As ECB’s Bond-Buying Plan Bolsters The Euro
Gold topped $1,700 an ounce for the first time since March as speculation that the European Central Bank will announce unlimited purchases of government bonds to defuse the region’s debt crisis boosted the euro.
Spot gold rose as much as 0.5 percent to $1,701.60 an ounce, and was at $1,701.38 at 2:20 p.m. in Singapore. The last time immediate-delivery bullion was above $1,700 an ounce was March 13. Assets in exchange-traded products expanded to a record 2,470.67 metric tons yesterday, data compiled by Bloomberg show.
The euro traded near a two-month high against the dollar after two central bank officials said that ECB President Mario Draghi will announce the purchases at a policy-setting meeting today. The bond-buying program will be sterilized to assuage concerns about printing money, according to the two. Gold tends to trade inversely to the U.S. currency.
“The market is optimistic about the ECB’s plan to rescue the region,” said Wang Xiaoli, chief investment strategist at CITICS Futures Co., a unit of China’s biggest listed brokerage. “Gold is getting a lift from the strength in the euro.”
The ECB has been at the forefront of fighting the crisis, which has so far pushed five countries into bailouts and driven the 17-nation euro economy to the brink of recession. In July, Draghi said he would do “whatever it takes” to defend the euro.
“The accumulation in exchange-traded funds indicates that many uncertainties remain in the global macroeconomic environment and investors are still willing to hold gold,” said Wang. “The $1,700 level presents strong technical and psychological resistance,” she said, referring to an area on a chart where sell orders may be clustered.
Platinum Gains
December-delivery gold gained as much as 0.6 percent to $1,703.90 an ounce on the Comex in New York and was at $1,703.80. The price has risen 8.7 percent this year.
Cash platinum rose for a fifth day, climbing as much as 0.8 percent to $1,583.50 an ounce, the highest price since April 23, and was last at $1,583.25.
Investors are buying platinum at the fastest pace since 2010 after disruptions at mines in South Africa, the largest producer, caused the biggest loss of supply in at least seven years. Purchases through exchange-traded products were the most in 20 months in August, data compiled by Bloomberg show.
Spot silver gained as much as 1.7 percent to $32.79 an ounce, the highest level since April 3, before trading at $32.785. Palladium advanced for a fifth day, adding as much as 0.4 percent to $647.25 an ounce, and was last at $646.50.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: Jake Lloyd-Smith at jlloydsmith@bloomberg.net
