27 March 2015
Gold Trims Weekly Advance as Yemen Conflict Weighed With Dollar
(Bloomberg) -- Gold pared the first back-to-back weekly climb since January as investors weighed a higher U.S. dollar against demand for a haven after Saudi Arabia and its allies started bombing targets in Yemen.
Bullion for immediate delivery fell as much as 0.4 percent to $1,200.10 an ounce and was at $1,201.91 by 11:07 a.m. in Singapore, paring this week’s gain to 1.6 percent, according to Bloomberg generic pricing. The metal rallied to $1,219.79 on March 26, the highest level since March 2, as it capped the longest run of advances since 2012. Gold traded in Shanghai headed for its first weekly advance in seven.
Investors have historically turned to precious metals in times of geopolitical tension. Gold was set for the first quarterly gain since June as the Saudis headed a coalition of 10 Sunni-ruled nations that carried out raids around Yemen’s capital. Saudi Arabia’s southern neighbor is near the center of world energy trade, and oil is poised to post the biggest weekly gain since 2011 amid concern supplies may be disrupted. The Bloomberg Dollar Spot Index rose the most in a week on Thursday.
“Gold prices rallied on safe-haven buying on concerns of geopolitical tensions as Saudi Arabia began air strikes in Yemen,” Australia & New Zealand Banking Group Ltd. said in a note. “Bullion pared back some of its gains with a strengthening U.S. dollar following release of upbeat U.S. data.”
Data on Thursday showed jobless claims dropped to the lowest level since mid-February. Fed Bank of Atlanta President Dennis Lockhart said the economy can handle moving to a higher-rate environment. Fed Chair Janet Yellen is scheduled to speak on monetary policy in San Francisco on Friday.
Gold for June delivery dropped 0.3 percent to $1,202.50 on the Comex and is set to gain 1.4 percent this week. Bullion of 99.99 percent purity climbed as much as 0.8 percent to 243 yuan a gram ($1,216 an ounce) before trading at 240.94 on the Shanghai Gold Exchange. Volumes for the benchmark spot contract were the highest on record on Thursday, according to data compiled by Bloomberg going back to 2002.
Silver for immediate delivery declined 0.4 percent to $17.0539 an ounce, trimming a second weekly advance. Platinum lost 0.2 percent to $1,151.25 an ounce and was set to gain for a second week. Palladium fell 0.3 percent to $768.32 an ounce to head for a third weekly loss, the longest run of declines since October.