Singapore - Gold climbed to a three-week high in New York on signs of increased physical and investment demand as the dollar weakened. Silver and platinum rose to the highest in two months.
Assets in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, climbed yesterday to 913.23 metric tons after gaining on August 9 for the first time in two months.
In China, the world’s largest consumer after India, the volume for Shanghai’s benchmark spot contract increased to 10.7 tons yesterday, the most since August 6, according to the Shanghai Gold Exchange.
Gold is heading for a second monthly advance after rising 7.3 percent in July, the most since January 2012.
“Gold is benefiting from a weaker dollar,” said Wang Xiaoli, chief investment strategist at CITICS Futures Co., a unit of China’s biggest listed brokerage.
“The SPDR is beginning to show signs of life again, but it’s too early to tell if the liquidation that has hurt gold this year is over. Physical demand, especially in Asia, remains supportive.”
Gold for December delivery increased 0.2 percent to $1,336.60 an ounce by 7:22 a.m. on the Comex in New York, after touching $1,345.90, the highest since July 24.
Bullion extended yesterday’s 1 percent gain as the Bloomberg US Dollar Index retreated today for a second day.
Gold for immediate delivery rose 0.1 percent to $1,337.68 an ounce in London.
Paulson Stake
Gold gained even as a US filing showed billionaire John Paulson cut holdings in the SPDR Gold Trust by 53 percent in the second quarter.
While SPDR holdings fell 32 percent this year, they are on course for their first weekly gain since December.
Paulson remains the biggest investor in the fund.
Filings showed billionaires George Soros and Daniel Loeb sold their entire stakes in the SPDR in the three months to June.
Gold tumbled into a bear market in April and is down 20 percent this year as investors sold it at a record pace from ETPs on speculation that the Federal Reserve will scale back its $85 billion in monthly bond-buying as the US economy recovers.
The Fed will start tapering from next month, according to 65 percent of economists surveyed by Bloomberg.
Demand fell 12 percent to a four-year low of 856.3 tons in the second quarter as ETP sales and less central-bank buying countered surging jewelry, bar and coin purchases, the World Gold Council said in a report today.
Consumer demand rose 71 percent in India and jumped 87 percent in China in the quarter.
Three-Year Low
Holdings in exchange-traded funds backed by gold reached a three-year low on August 8, according to data compiled by Bloomberg.
They rebounded by yesterday to 1,950.1 tons, the highest since August 6.
“Signs that the long period of ETF liquidation is close to ending” supported gold, Wiktor Bielski, an analyst at VTB Capital in London, said in an e-mailed report today.
Silver for September delivery gained 1.3 percent to $22.06 an ounce in New York and reached $22.165, the highest since June 14.
The metal headed for a sixth gain, the longest winning run since March.
Platinum for October delivery climbed 0.7 percent to $1,515.30 an ounce and touched $1,523.90, the highest since June 7.
Palladium for September delivery rose 1.2 percent to $748.90 an ounce and reached $752.50, the highest since July 22. - Bloomberg News