Gold climbs as biggest weekly loss since November spurs demand
Prices are set to drop 3.6% this week, the first such loss since the period ended 31 January and biggest decline since 22 November
Melbourne: Gold advanced on speculation that the largest weekly loss since November would spur physical demand even after the Federal Reserve said interest rates may increase and as Goldman Sachs Group Inc predicts declines.
Bullion for immediate delivery gained as much as 0.6% to $1,335.63 an ounce and was at $1,333.23 by 12:21 am in Singapore. Prices are set to drop 3.6% this week, the first such loss since the period ended 31 January and biggest decline since 22 November. Gold for June delivery rose 0.3% to $1,334 an ounce on the Comex in New York.
Fed Chair Janet Yellen said this week that interest rates could rise around six months after asset purchases end, most likely in the fall. Policy makers cut monthly bond-buying by $10 billion at the conclusion of their 2-day meeting, leaving purchases at $55 billion. Prices reached a six-month high on 17 March as turmoil over Ukraine left Russia and the West embroiled in their worst confrontation since the Cold War.
The risk premiums have been taken out of it, said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin in Sydney. We buy gold as means for a hedge against something, as a store of value. When that evaporates from the market then it really only comes down to the physical buying mentality of people that will put a floor in place.
Gold held in exchange-traded products rose for a second day on 19 March, increasing 1.5 metric tons to 1,764 tons, data compiled by Bloomberg show. Assets in the SPDR Gold Trust, the biggest gold-backed ETP, were unchanged at 812.78 metric tons on Thursday, according to data on the fund’s website.
China discount
In China, the largest consumer, volumes for the benchmark spot contract in Shanghai rose to a three-week high on 19 March. The metal of 99.99% purity for immediate delivery traded $3.85 an ounce below the London price on Friday. Jeffrey Currie, Goldman’s head of commodities research, said this month the gains would be short-lived and the chances are increasing prices will reach $1,000 for the first time since 2009.
Silver for immediate delivery added 0.5% to $20.363 an ounce, trimming this week’s 4.9% decline, the biggest loss since September. Platinum advanced 0.4% to $1,437.88 an ounce, set to drop 2.2% this week. Palladium rose 0.3% to $772.47 an ounce. BLOOMBERG
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!