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Gold Swings Between Gains and Declines as Central Banks Buy

Nov. 21 (Bloomberg) -- Gold swung between gains and losses in New York as the dollar pared gains from near a two-month high and investors and central banks increased bullion holdings.

The U.S. Dollar Index, a measure against six major trading partners, was little changed after European finance ministers failed to agree on a debt-reduction package for Greece. It reached the highest since Sept. 5 last week. Gold held in exchange-traded products rose to a record. Brazil, Kazakhstan and Russia added to bullion reserves last month, data on the International Monetary Fund’s website show. Markets in the U.S. are closed tomorrow for a holiday.

“Physical demand has been quite good,” Bernard Sin, head of currency and metal trading at bullion refiner MKS Finance SA in Geneva, said today by phone. “Gold is really reacting to the dollar movement. Because of the Thanksgiving holiday, the market is going to be very illiquid.”

Gold for December delivery rose 0.1 percent to $1,725.50 an ounce by 7:56 a.m. on the Comex in New York. Prices gained and fell as much as 0.3 percent and reached $1,736 yesterday, the highest since Nov. 12. Bullion for immediate delivery was down 0.1 percent at $1,725.43 in London.

Holdings in gold-backed exchange-traded products rose 0.7 metric ton to a record 2,604.9 tons yesterday, data compiled by Bloomberg show. Assets and prices gained this year as central banks from the U.S. to Asia took steps to bolster economies.

Brazil added 17.2 tons to bullion reserves last month, Kazakhstan expanded them by 7.5 tons and Russia bought 0.4 ton, IMF data show.

Silver for December delivery added 0.3 percent to $33.02 an ounce, after reaching $33.26 yesterday, the highest since Oct. 18. Platinum for January delivery was little changed at $1,572.40 an ounce. Palladium for December delivery fell 0.1 percent to $637.45 an ounce.

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