Singapore - Gold climbed for a fourth day, advancing to the highest level in almost two weeks, after China announced a second interest-rate cut in three months and the US reported a slower pace of economic expansion than estimated.
Bullion for immediate delivery rose as much as 0.8 percent to $1,223.31 an ounce, the highest since February 17, before trading at $1,222.37 by 1.52pm in Singapore, according to Bloomberg generic pricing. A fourth day of gains would be the longest run since October 9. Prices climbed 0.9 percent last week for the first weekly increase in five.
The People’s Bank of China lowered the benchmark lending and deposit rates by a quarter percentage point on Saturday. A day later, a factory gauge for February signaled contraction for a second month, underscoring the need for looser policy. The US grew at a 2.2 percent annualised rate, down from an estimate of 2.6 percent, the Commerce Department said Friday. Bullion imports by India may increase this month after the biggest consumer confounded industry expectations for a tax cut.
“The slowdown in China remains a huge risk to global growth, supporting demand for gold,” Sun Yonggang, a strategist at Everbright Futures Company in Shanghai, said by phone on Monday. “Gold received a boost from the latest US data, which suggests that growth may not be as strong as perceived.”
The Bloomberg Dollar Spot Index added 0.2 percent to 1,174.12. The currency rose 0.4 percent against 10 major peers in February, the least since a cycle of appreciation that began in July, amid reports of sluggish inflation and the downward revision of growth. Federal Reserve Chair Janet Yellen signaled last week that an interest-rate increase isn’t imminent.
Indian Imports
India retained the 10 percent duty in the budget on February 28, while announcing plans to tap a part of the 20 000 tons of locally stockpiled gold to lower reliance on imports. Overseas purchases may jump to 100 metric tons in March from about 25 tons in February as jewellers and traders, who delayed purchases in anticipation of the tax cut, replenish stockpiles, according to Rajesh Mehta, chairman of Rajesh Exports Ltd.
Bullion for April delivery advanced as much as 0.8 percent to $1,223 an ounce on the Comex in New York, the highest level for a most-active contract since February 17, and was at $1,220.30.
Silver for immediate delivery rose 1 percent to $16.7607 an ounce, extending last week’s 2.2 percent increase. Spot platinum added as much as 0.4 percent to $1,193.88 an ounce, the highest since February 17, before trading at $1,193.25. Palladium was 0.4 percent higher at $820.92 an ounce after climbing to $820.97 earlier, the highest since December 11.
Bloomberg