Gold rallied to the highest level since November as investors assessed further cuts to U.S. stimulus and Chinese buyers increased purchases to extend last year’s record consumption. Silver, platinum and palladium rose.
Bullion for immediate delivery gained as much as 1 percent to $1,287.81 an ounce, the highest price since Nov. 18, and was at $1,283.85 by 3:01 p.m. in Singapore. A fifth day of advance would be the longest such run since August, when bullion gained 5.3 percent. Silver added 0.2 percent to $20.1175 an ounce, climbing for an eighth day in the longest rally since August.
Janet Yellen will today deliver her first testimony to Congress since being sworn in as Federal Reserve chairman after U.S. jobs growth data missed estimates last week. Volumes for Shanghai’s spot contract surged to a nine-month high after a report yesterday that showed China’s demand rose 41 percent in 2013. Holdings in the SPDR Gold Trust, the biggest exchange-traded product backed by bullion, were unchanged for a fourth day after the first back-to-back weekly increase since August.
“Investors aren’t ruling out the possibility that the Fed may pause tapering as recent employment data in the U.S. hasn’t been encouraging,” said Ethan Wai, a research analyst at Wing Fung Financial Group, a Hong Kong-based gold trader and refiner. “Any hint of that is good for gold.”
Bullion is up 6.6 percent this year as a rout in emerging markets spurred demand for haven assets. The metal’s advance came even as the Fed said Jan. 29 that it will trim monthly bond buying by another $10 billion as the economy strengthens.
Volumes for spot bullion of 99.99 percent purity on the Shanghai Gold Exchange climbed to 25,725 kilograms yesterday, the most since May. Demand in China, which probably overtook India as the largest user last year, surged to 1,176.4 metric tons in 2013, the China Gold Association said.
“Chinese buyers have been quite active but the longer-term picture for gold remains bearish against the backdrop of continued stimulus reduction in the U.S.,” said Yang Xi, a Hangzhou-based analyst at Yongan Futures Co. “Gold’s support may come in the form of haven demand, if further tapering results in more capital outflows from emerging markets.”
Gold for April delivery increased as much as 1 percent to $1,287.50 an ounce on the Comex, the highest level for a most-active contract since Nov. 18, and traded at $1,283.20. A fifth day of gains would be the longest such run since August.
Holdings in the SPDR Gold Trust, which contracted by a record 41 percent last year, expanded 0.5 percent last week following a 0.3 percent gain in the period to Jan. 31.
Platinum gained 0.4 percent to $1,391.63 an ounce, rising for a third day. Talks to end a strike over pay that has crippled production at the world’s largest platinum mines have been delayed to Feb. 13 from today after the companies requested more time. Palladium advanced 0.4 percent to $720.75 an ounce, gaining for a fifth day in the longest rally since October.
