January 2, 2015
Gold Advances as Growth Concern Spurs Demand; Palladium Drops
(Bloomberg)- Gold climbed with silver amid concern that growth may be slowing from China toEurope even as the U.S. recovers, spurring demand for a protection of wealth. Palladium headed for the biggest weekly drop since October.
Bullion for immediate delivery rose as much as 0.6 percent to $1,188.46 an ounce and was at $1,185.81 by 11:41 a.m. in Singapore, according to Bloomberg generic pricing. The metal is still headed for a 0.9 percent weekly loss with the dollar poised for a third weekly advance.
Gold posted the first back-to-back annual decline last year since 2000 as investors speculated that the Federal Reserve will raise interest rates, boosting the dollar to a five-year high. Holdings in the biggest exchange-traded product backed by the metal contracted to a six-year low. While the U.S. economy showed further signs of recovery in 2014, policy makers in China, Europe and Japan added stimulus to spur growth.
“Gold’s still favorably looked at from the perspective of being a safe place to hold money,” Gavin Wendt, founder and senior analyst at Mine Life Pty in Sydney, said by phone today. “Although the U.S. economy is performing very strongly, there are still negative patches out there in the world economy. The gold-price outlook is still very, very sound.”
A Chinese manufacturing gauge slipped in December to the lowest level in 18 months, adding to evidence that the world’s second-largest economy probably grew last year at the slowest pace since 1990, a Bloomberg survey showed. Singapore expanded less than economists estimated last quarter after its manufacturing industry weakened.
The MSCI All-Country World Index of equities traded at the lowest level since Dec. 19, heading for the first weekly drop since the period to Dec. 12. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 currencies, climbed to the highest level in more than five years.
Gold for February delivery rose 0.1 percent to $1,185.40 an ounce on the Comex inNew York compared with the close of $1,184.10 on Dec. 31. Futures, which fell 1.5 percent last year, are still headed for a third straight week of losses.
Assets in the SPDR Gold Trust were unchanged yesterday at 709.02 metric tons, the lowest level since September 2008, after falling 0.3 percent on Dec. 31, data compiled by Bloomberg show.
Silver for immediate delivery rallied as much as 1.6 percent to $15.9125 an ounce and traded at $15.8183, paring a third weekly decline. Spot platinum retreated 0.1 percent to $1,208.75 an ounce.
Palladium lost 0.5 percent to $793 an ounce, dropping for a fifth day in the longest such streak since July. The commodity, the best-performing main precious metal last year, is 3.1 percent lower this week.