Gold Heads for Second Weekly Advance as Swiss Shock Boosts SPDR Gold traded near a four-month high, set for a second weekly gain, on haven demand after Switzerland’s unexpected currency move. Assets in the largest exchange-traded product expanded the most since 2011. Bullion for immediate delivery was at $1,257.66 an ounce at 2:14 p.m. in Singapore from $1,262.75 a day earlier, when prices jumped 2.8 percent for the biggest increase this year, according to Bloomberg generic pricing. The metal rallied on Thursday to $1,266.85, the highest since Sept. 8, as the Swiss National Bank ended the franc’s cap versus the euro. Gold traded at its most expensive relative to platinum since April 2013. Gold rose 2.8 percent this week, extending a 2.9 percent increase a week earlier, as the Swiss bank’s move roiled currency and equity markets. That spurred demand for the bullion as a haven as investors returned to ETPs, according to Australia & New Zealand Banking Group Ltd. The SNB’s decision comes a week before European Central Bank policy makers meet on Jan. 22 to discuss introducing new stimulus amid concern Greece may exit the currency bloc after a Jan. 25 election. “Precious metals have caught a break as Europe moves closer to full-blown quantitative easing,” said Lv Jie, an analyst at Cinda Futures Co., a unit of one of four funds in China created to buy bad debt from banks. “While loose monetary policy is expected to continue around the world, highlighting differences with the U.S., this ultimately strengthens the dollar, which is negative for gold.” The Bloomberg Dollar Spot Index held a two-day drop before U.S. data on consumer prices. A slump in commodity prices led by oil and copper may curb inflation, which has been under the Federal Reserve’s 2 percent target for 31 months, increasing speculation the central bank may hold back from raising its key rate, which has been kept near zero since 2008 to spur growth. Overbought Signal Gold’s rally sent the metal’s 14-day relative-strength index toward the level of 70 that signals to some investors that prices may reverse. The gauge was at 66.59 on Friday from 68.52 a day earlier. Bullion denominated in euros climbed to the highest level since May 2013 as the SNB also deepened negative deposit rates on Jan. 15. Holdings in the SPDR Gold Trust expanded 1.4 percent to 717.15 metric tons on Jan. 15, the biggest jump since August 2011. The assets contracted 41 percent in 2013 and fell a further 11 percent last year as prices dropped. “The safe haven bid is well and truly dominating right now,” said Victor Thianpiriya, an analyst at ANZ in Singapore. “There’s still a lot of uncertainty around in the near-term.” Winning Streak Gold for February delivery lost 0.5 percent to $1,258.90 an ounce on the Comex in New York, halting a five-day rally that was the longest winning streak since June. Futures rose a day earlier to $1,267.20, the highest since Sept. 8. One ounce of platinum bought as few as 0.9951 ounces of gold on Friday. Platinum for immediate delivery fell 0.3 percent to $1,255.75 an ounce, after prices climbed 2.2 percent a day earlier. This week, it’s risen 1.8 percent. Spot silver rose 0.6 percent to $17.0497 an ounce, after advancing a day earlier to $17.2258, the highest level since Dec. 10. The metal is heading for a second weekly increase. Palladium rose 0.4 percent to $769.85 an ounce, trimming the biggest weekly loss since September. courtesy: Bloomberg:
Posted on: Fri, 16 Jan 2015 08:37:40 +0000
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