23 January 2015
Gold Holding Near Five-Month High After ECB Announces Stimulus
(Bloomberg) - Gold held near the highest level in five months and headed for its third straight weekly gain after the European Central Bank expanded stimulus measures and Russia added to its reserves for the ninth month.
Bullion for immediate delivery traded at $1,298.34 an ounce by 12:07 pa.m. in Singapore from $1,302.25 on Thursday, Bloomberg generic pricing shows. Prices touched $1,307.62 on Jan. 22, the highest since Aug. 15., and have risen 1.4 percent this week.
Gold jumped 9.6 percent this year as stagnating economies challenged policy makers to find new ways to buoy growth. ECB President Mario Draghi pledged to buy 60 billion euros every month through September next year in a push to put more cash in circulation and revive inflation. Russia’s reserves, the world’s fifth biggest, rose to about 38.8 million ounces by Jan. 1 from 38.2 million ounces a month earlier, the central bank said.
“The market’s been well aware that Europe has not been doing very well for the last two years, really it’s been the laggard,” and the ECB has confirmed that, said David Lennox, a resource analyst at Fat Prophets in Sydney. Prices may also be supported by speculation the U.S. Federal Reserve will struggle to raise interest rates this year, he said by phone today.
U.S. policy makers meet Jan. 27-28 to discuss interest rates as inflation hovers below a 2 percent target and the economy shows improvement. The Fed last month said it would be “patient” in raising rates for the first time since 2006.
Gold for February delivery retreated 0.2 percent to $1,298.10 on the Comex. Silver for immediate delivery traded at $18.3266 an ounce from $18.3342. Prices are set for a third weekly increase, the longest rally since the period ended July 11. Palladium fell 1.1 percent to $768 an ounce, trimming a weekly advance. Platinum lost 0.6 percent to $1,277.25 an ounce.