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Gold Climbs From 1-Week Low as Lower Equities Spur Haven Demand

Jan. 31 (Bloomberg) -- Gold gained from a one-week low in New York, narrowing the first weekly loss since December, as investors weighed weaker equities that increased demand for a haven against slowing physical purchases from Asia.

Bullion dropped 1.6 percent yesterday, the most since Dec. 19, reaching a one-week low of $1,237.50 an ounce. The U.S. economy expanded at a 3.2 percent pace in the fourth quarter, matching the median forecast in a Bloomberg poll, data showed yesterday. Gold still beat a 1.2 percent gain this month for the Bloomberg Dollar Spot Index and a 1.6 percent advance in the Bloomberg U.S. Treasury Bond Index.

Gold tumbled 28 percent last year, the most since 1981, and the Federal Reserve said Jan. 29 it will further trim monthly bond buying. Lower prices that spurred physical demand helped gold rebound from a six-month low of $1,181.40 set Dec. 31, with Chinese consumers traditionally increasing gold purchases before the Lunar New Year holiday that starts today and lasts a week. Global equities neared the lowest level since October today and emerging-market currencies dropped.

“The stock market is being hammered and that’s translating into some safe-haven buying,” Bernard Sin, head of currency and metal trading at bullion refiner MKS (Switzerland) SA in Geneva, said today by phone. “There’s an absence of physical demand” and holidays in Asia may limit gold’s direction, he said.

Bullion for April delivery rose 0.4 percent to $1,247.70 an ounce by 7:58 a.m. on the Comex in New York. Prices slid 1.3 percent this week, the most since Dec. 20 and narrowing the first monthly advance since August to 3.8 percent. Futures trading volume was 9 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed. Gold for immediate delivery added 0.4 percent to $1,248.93.

Emerging Markets

Bullion gained earlier this week as a rout in emerging- market currencies boosted demand for the metal as a haven. Still, holdings in gold-backed exchange-traded products are near the lowest since October 2009, data compiled by Bloomberg show.

Silver for delivery in March rose 1 percent to $19.32 an ounce. It reached $18.97 yesterday, the lowest this year. Palladium for the same month added 0.1 percent to $707.60 an ounce. It earlier fell to a one-month low of $702.85 after declining the past six days. Platinum for April delivery gained 0.2 percent to $1,384.60 an ounce, after earlier today reaching $1,377.30, the lowest since Jan. 2.

Platinum mining in South Africa, which accounts for 70 percent of the world’s supply of the metal, has been curbed since the Association of Mineworkers and Construction Union called its members on strike on Jan. 23 at Anglo American Platinum, Impala Platinum Holdings Ltd. and Lonmin Plc. The National Union of Metalworkers of South Africa yesterday notified Anglo American about its plan to walk out from Feb. 3.

Platinum prices have fallen partly on speculation the mining companies have built stockpiles to meet lost output. Anglo American and Impala can continue to fulfill customers’ orders for six to eight weeks, spokesmen for the Johannesburg- based companies have said.

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