05 February 2015
Gold Extends Gain as Greece Debt, Global Easing Fan Haven Demand
(Bloomberg) - Gold climbed for a second day as policy makers in Europe tightened the terms of Greece’s bailout and the People’s Bank of China joined central banks acting to counter slower growth, boosting demand for a haven.
Bullion for immediate delivery rose as much as 0.4 percent to $1,274.18 an ounce, and traded at $1,271.10 at 11:47 a.m. in Singapore, extending Wednesday’s 0.7 percent gain, according to Bloomberg generic pricing. The metal rebounded from a two-day, 1.8 percent drop even as the Bloomberg Dollar Spot Index rose.
Gold climbed 7.3 percent this year, partly on concern that Greece may exit the euro area as the country that triggered the region’s sovereign-debt crisis in 2009 renegotiates its debt. The PBOC on Wednesday lowered lenders’ reserve ratio, joining more than a dozen counterparts in easing policy this year. Gold also rallied after two years of losses on speculation the Federal Reserve may hold off raising rates as concern grows that the largest economy won’t be shielded from a slowdown overseas.
“Central banks appear to be in a monetary-easing race, which provides only a small support to gold because the dollar also strengthens,” Zhu Chunming, a Shenzhen, China-based analyst at Citic Futures Co., wrote in a note. “Any sign of trouble in Greece will help prices but the market is likely to move cautiously before the upcoming U.S. jobs report.”
The European Central Bank said late on Wednesday that it will no longer waive its collateral rules for Greek government debt in a move that will raise financing costs for the nation’s banks and stiffen oversight by the central bank. Greece’s Finance Ministry said the decision doesn’t reflect any negative developments in the country’s financial sector.
Government data on Friday may show U.S. employers continued to add workers in January. Fed Bank of Cleveland President Loretta Mester said rates should be raised “soon” amid mounting economic momentum, significant improvement in labor markets, and the boost consumers will get from cheaper fuel.
Gold for April delivery advanced 0.6 percent to $1,272.30 an ounce on the Comex in New York, after climbing 0.3 percent a day earlier. Assets held by exchange-traded products backed by bullion added 0.2 percent to 53,714,935 ounces on Feb. 4, data compiled by Bloomberg show.
Silver for immediate delivery rose 0.5 percent to $17.452 an ounce. Spot platinum gained 0.1 percent to $1,241.88 an ounce and palladium increased 0.4 percent to $795.85 an ounce.