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Gold Futures Gain on Drop to One-Month Low, Stimulus Outlook

Dec. 10 (Bloomberg) -- Gold gained for a third day in New York after a recent slide to a one-month low and speculation of more U.S. stimulus boosted demand.

Bullion declined as much as 1 percent on Dec. 7 after a report showed that the U.S. added more jobs than expected last month and the dollar strengthened. The greenback was near a two- week high versus the euro after Italy’s prime minister said he intends to resign, with gains limited amid speculation the Federal Reserve may announce more bond purchases this week.

“Physical demand has responded to prices at one-month lows,” Suki Cooper, an analyst at Barclays Plc in New York, wrote today in a report. “A number of price triggers are stacked in gold’s favor over the forthcoming months, given our economists’ view for further expansion of the U.S. balance sheet.”

Gold for February delivery rose 0.5 percent to $1,713.90 an ounce by 7:50 a.m. on the Comex in New York. It slid to $1,684.10 on Dec. 7, the lowest since Nov. 6. Gold for immediate delivery was 0.5 percent higher at $1,712.70 in London.

Holdings in gold-backed exchange-traded products gained 1.9 metric tons to a record 2,629.2 tons on Dec. 7, data compiled by Bloomberg show. Prices are set for a 12th consecutive annual gain as central banks from the U.S. to China pledge more steps to spur economic growth.

The Fed will announce its latest policy decision Dec. 12. It will consider whether to expand purchases of assets after its so-called Operation Twist program of swapping $45 billion a month in short-term Treasuries for long-term debt expires this month.

Turkey’s Exports

Without gold exports to Iran, Turkey would have “almost certainly” fallen into a recession, Neil Shearing, chief economist at Capital Economics Ltd., said in an e-mailed report today. Gold exports to Iran and the United Arab Emirates are deals between private firms and are not payments for oil or gas, Economy Minister Zafer Caglayan said on CNBC-e television today.

Silver for March delivery rose 0.8 percent to $33.40 an ounce. Platinum for January delivery was 0.7 percent higher at $1,617.90 an ounce. Holdings of the metal in ETPs reached a record 48 tons on Dec. 7, data compiled by Bloomberg show. Palladium for March delivery added 0.2 percent to $699.20 an ounce, after matching an almost three-month high of $702 set on Dec. 7.

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