April 16 (Bloomberg) -- Gold traded above the lowest price in more than a week in New York as investors weighed turmoil over Ukraine against the outlook for an improving U.S. economy.
Gold fell 2 percent yesterday, the most since December, as data indicated U.S. consumer prices accelerated in March. A report released this week showed retail sales increased more in March than economists forecast. The metal slid the most since 1981 last year on the outlook for reduced U.S. stimulus.
Federal Reserve Chair Janet Yellen will address the Economic Club of New York today. She said in March borrowing costs may start to rise “around six months” after the conclusion of asset buying, which economists forecast will end this year. Since then, minutes of the Fed’s last meeting played down forecasts for higher interest rates. Gold rebounded 8.4 percent this year as the Ukraine crisis spurred haven demand.
“U.S. macro numbers continue to improve, cementing the case for gradual” tapering of stimulus, Andrey Kryuchenkov, an analyst at VTB Capital in London, wrote today in a report. “The volatile situation in Ukraine is still distorting global markets, with some nervous investors opting for bullion’s safety.”
Gold for June delivery added 0.2 percent to $1,303.20 an ounce by 7:29 a.m. on the Comex in New York. It reached $1,284.40 yesterday, the lowest since April 4. Futures volume was 20 percent above the average for the past 100 days for this time of day, data compiled by Bloomberg showed. Bullion for immediate delivery was little changed at $1,303.31 in London, according to Bloomberg generic pricing.
Yesterday’s decline accelerated on technical selling after prices dropped below the 200-day moving average, Edward Meir, an analyst at INTL FCStone Inc. in New York, said in a report written late yesterday.
Ukraine accused Russia of fueling “terrorism” in its eastern provinces as government troops pressed on with an offensive to rein in separatist unrest. The U.S. and its European allies are threatening a new round of penalties against Russian interests if the crisis continues. Envoys from Ukraine, Russia, the U.S. and European Union are scheduled to hold talks tomorrow in Geneva on the situation.
Economic growth in China, last year’s biggest gold buyer, was at the weakest pace in six quarters in the January-to-March period, data showed today. Gold demand in China may face “some headwind” amid economic reform, Albert Cheng, Far East managing director at the World Gold Council, said in a Bloomberg Television interview. As much as 1,000 metric tons in China may be tied up in financing deals, the council said yesterday.
Silver for May delivery gained 0.5 percent to $19.58 an ounce in New York, after falling to $19.22 yesterday, the lowest since Feb. 3. Platinum for July delivery lost 0.3 percent to $1,440.20 an ounce. Palladium for June delivery rose 0.3 percent to $798.55 an ounce. It advanced to $817 on April 14, the highest since August 2011.
Palladium gained 11 percent this year as the threat of disruption to Russian exports compounded concerns about supply spurred by a miners’ strike in South Africa, the second-biggest supplier and the largest platinum producer, that started in January. Holdings of both metals in exchange-traded products are at records, data compiled by Bloomberg show.