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Gold Climbs to Two Month-High in New York as Equities Decline

Jan. 24 (Bloomberg) -- Gold climbed to a two-month high in New York, heading for the longest weekly rally since September 2012, as declines in European equities spurred demand for the metal as an alternative investment.

European stocks declined as much as 1.7 percent. Gold futures jumped 1.9 percent yesterday, the most since Dec. 10, as data showed the number of Americans continuing to receive jobless benefits unexpectedly increased. Bullion advanced 1.3 percent this week for a fifth weekly increase.

Fed policy makers meet Jan. 28-29, after deciding in December to cut monthly bond buying as the economy improved, and will end the program this year, according to the median forecasts of economists in a Bloomberg survey. Gold rose as much as 7.8 percent from a six-month low set Dec. 31 on signs of increased physical demand, particularly in China.

“European stock markets are down and there’s a bit of a confidence shift into gold,” Bernard Sin, head of currency and metal trading at bullion refiner MKS (Switzerland) SA in Geneva, said today by phone. “We’re seeing a lot of interest.”

Bullion for April delivery gained as much as 0.8 percent to $1,273.20 an ounce, the highest since Nov. 20, and was at $1,268.60 by 7:43 a.m. on the Comex in New York. It fell as much as 0.4 percent earlier today. Futures trading volume was 66 percent above the average for the past 100 days for this time of day, data compiled by Bloomberg showed. Gold for immediate delivery increased 0.4 percent to $1,268.90.

Silver for delivery in March rose 0.9 percent to $20.20 an ounce. Palladium for the same month was little changed at $745 an ounce. Platinum for April delivery fell 0.8 percent to $1,451.60 an ounce, with the price down 0.2 percent this week after four straight weekly gains.

Talks between South Africa’s government, union officials and the world’s three biggest platinum producers are due to resume Jan. 27 after a strike that’s crippling mines entered a second day. At least 70,000 employees downed tools at Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Lonmin Plc mines yesterday in the country, home to 70 percent of global platinum output.

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