Gold climbs to 2-week high as China resumes buying

Gold rose to a two-week high, set for the longest rally since October, as U.S. jobs data missed estimates and Chinese buyers returned after the Lunar New Year break. Silver headed for the longest winning run since August.

Bullion for immediate delivery rose as much as 0.7 percent to $1,276.03 an ounce, the highest level since Jan. 27 and surpassing its 100-day moving average of $1,267.43, before trading at $1,273.41 at 3:11 p.m. in Singapore. Prices advanced 1.8 percent last week as a rout in emerging markets spurred haven demand. They are up for a fourth day today. Silver added 0.7 percent to $20.1633 an ounce, climbing for a seventh day.

Gold beat all other metals on the Standard & Poor’s GSCI Spot Index of 24 raw materials this year as a selloff from bullion-backed exchange-traded products lost momentum. Data on U.S. employment growth trailed forecasts last week, sending the Bloomberg U.S. Dollar Index lower for a fifth day, as investors reassessed the Federal Reserve’s plan to cut stimulus. China’s demand expanded to a record last year, surging 41 percent, according to data from the China Gold Association today.

“Data continues to point to an uneven U.S. recovery, and coupled with the selloff in emerging markets, gold and silver are benefiting from increased demand for safer assets,” said Zhu Siquan, an analyst at GF Futures Co., a unit of the Guangzhou-based firm that bought Natixis Commodity Markets Ltd. last year. “Whether gold can sustain the recent upward momentum depends on economic data and how the dollar, equities and other markets interpret and react to those numbers.”

Volumes for the benchmark contract on the Shanghai Gold Exchange climbed to a one-month high on Feb. 7, when the market reopened after a weeklong break. Demand in China, which probably overtook India as the world’s largest user last year, surged to 1,176.4 metric tons in 2013, the China Gold Association said.

Janet Yellen, the new Fed chairman, will speak before Congress tomorrow for the first time since being sworn in, after the central bank said Jan. 29 it will trim monthly bond buying by $10 billion. Policy makers decided in December to cut purchases by the same amount as the economy improved.

Holdings in the SPDR Gold Trust, the biggest bullion-backed ETP, expanded 0.5 percent last week for the first back-to-back weekly increase since August. The holdings in the SPDR contracted 41 percent last year, a record decline.

Bullion for April delivery rose 0.8 percent to $1,273.20 an ounce on the Comex in New York, extending its biggest weekly advance in a month. A fourth day of gains would be the longest rally since August.

Spot platinum increased 0.4 percent to $1,389.68 an ounce, after posting its first weekly gain in three. Talks to end a strike that has crippled production at the world’s three largest producers in South Africa will resume tomorrow after protests left one person dead. Palladium added 0.9 percent to $717.18 an ounce, after halting two weeks of losses.-Bloomberg