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Gold Gains to Two-Week High on U.S. Jobs as China Resumes Buying

Feb. 10 (Bloomberg) -- Gold rose to a two-week high in the longest rally since August in New York, as U.S. jobs data missed estimates and Chinese buyers returned from a holiday. Silver futures headed for the longest winning run in almost six months.

Data released Feb. 7 showed U.S. payrolls rose less than projected in January, sending the Bloomberg Dollar Spot Index to a three-week low. The gauge against 10 currencies was little changed today. Janet Yellen, the new Federal Reserve chairman, will give testimony tomorrow after the central bank said Jan. 29 it will trim monthly bond buying by $10 billion.

Gold, which dropped by the most since 1981 last year, rebounded since the start of January as global equities declined and lower bullion prices spurred more physical demand. Volumes for the benchmark contract on the Shanghai Gold Exchange, which opened on Feb. 7 after a weeklong New Year holiday, climbed to the highest since May today.

“After being out of the market for a week, China returned on Friday and provided the strong floor to prices,” Abhishek Chinchalkar, an analyst at Mumbai-based AnandRathi Commodities Ltd., said in a report. Following the U.S. jobs data, Yellen’s “comments will be closely scrutinized to gauge whether the Fed is likely to continue tapering at a measured pace or could consider pausing if data from the U.S. disappoint,” he said.

Bullion for April delivery rose 0.8 percent to $1,273.10 an ounce by 7:38 a.m. on the Comex in New York. It reached $1,276.20, the highest since Jan. 27, and is up for a fourth day in the best run since Aug. 12. Futures trading volume was 7.4 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed. Gold for immediate delivery gained 0.5 percent to $1,273.87.

Chinese Demand

Demand in China, which probably overtook India as the world’s largest user last year, surged 41 percent to a record 1,176.4 metric tons in 2013, the China Gold Association said today. Holdings in gold-backed exchange-traded products, which are mostly listed in the U.S. and Europe, fell to the lowest since October 2009 last month, data compiled by Bloomberg show.

Silver for delivery in March rose 1.3 percent to $20.205 an ounce, and a sixth successive daily advance would be the longest since Aug. 16. Palladium for delivery in the same month climbed 1.4 percent to $718.90 an ounce. Platinum for April delivery increased 0.8 percent to $1,389.90 an ounce.

Talks to end a strike over pay that has crippled production at the world’s largest platinum mines will resume in South Africa tomorrow. The Association of Mineworkers and Construction Union called out more than 70,000 workers on a strike that has cost employers about $18 million a day since Jan. 23.

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