BLBG: Gold Near One-Week High; Palladium at Highest Since 2011
Gold traded near the highest price in a week in London as investors weighed a decline in the dollar against signs of an improving economy that may cut bullion demand. Palladium reached a 34-month high.
The dollar was little changed near a two-week low set versus the euro on June 6, when gold climbed to a one-week high. The metal slipped 3.2 percent last month, as signs of an improving U.S. economy sent equities there to a record.
U.S. data this week may show retail sales rose after a June 6 report showed employment exceeding its pre-recession peak. Bullion slid 28 percent last year on expectation the Federal Reserve would reduce bond purchases. The central bank has made four cuts since January and next meets June 17-18. Palladium rose 18 percent this year as mine workers downed tools since January in South Africa, the second-largest producer.
“The price of gold is being tagged to the dollar,” Bernard Sin, the head of currency and metal trading at MKS (Switzerland) SA, a Geneva-based refiner, said today by phone. “Physical buyers are waiting for prices to drop before buying. It looks like the U.S. economy is improving,” which should cut demand for the metal, he said.
Bullion for immediate delivery added 0.2 percent to $1,255.31 an ounce by 10:07 a.m. in London, according to Bloomberg generic pricing. It reached $1,257.81 on June 6, three days after falling to a four-month low of $1,240.73. Gold for August delivery rose 0.2 percent to $1,255.40 on the Comex in New York.
Futures Trading
Futures trading volume was 52 percent below the average for the past 100 days for this time of day, according to data compiled by Bloomberg. Bullion’s 60-day historical volatility fell to the lowest since April 2013.
Holdings in gold-backed exchange-traded products fell 2.1 metric tons to 1,715.7 tons on June 6, the lowest since October 2009, data compiled by Bloomberg show.
Silver for immediate delivery rose 0.5 percent to $19.1295 an ounce in London. Platinum was little changed at $1,452.25 an ounce. Palladium was little changed at $844.15 an ounce. It reached $846.29, the highest since Aug. 1, 2011.
Mineworkers have been on strike since January in South Africa, the largest platinum producer. Minister of Mineral Resources Ngoako Ramatlhodi said June 7 that today would be the last government-led meeting to resolve the impasse. Palladium ETPs rose to a record on June 6 and platinum assets reached an all-time high last month.
“Although palladium’s fundamentals remain very attractive, overextended positioning suggests a short-term pullback once a resolution in South Africa is reached could be quite violent,” UBS AG analysts wrote in a report today. “We would be buyers of those corrections.”
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: Claudia Carpenter at ccarpenter2@bloomberg.net John Deane
