London - Gold traded near a two-month high after holdings in the largest exchange-traded product posted the first weekly expansion this year. Silver headed for the longest daily rally since March 2008.
Spot gold gained as much as 0.6 percent to $1,384.55 an ounce, the highest price since June 18, and traded at $1,375.26 at 2.24pm in Singapore. Silver rallied as much as 1.6 percent to $23.6225 an ounce, the highest level since May 14, gaining for a ninth day after entering a bull market last week.
Gold is heading for a second monthly climb as holdings in the SPDR Gold Trust, the biggest ETP, capped a weekly gain for the first time since December. Global bar and coin purchases reached a record last quarter and jewellery usage rose to the most since 2008 after prices slumped into a bear market in April, World Gold Council figures showed last week. US Commodity Futures Trading Commission data show bets on lower prices fell.
“Sentiment toward gold is turning more positive as evidenced by the SPDR and CFTC data,” Sun Yonggang, a macroeconomic strategist at Everbright Futures, said from Shanghai. “While the World Gold Council data merely confirmed what we knew, it shows that there are still people out there interested in owning gold.”
Holdings in the SPDR expanded 0.5 percent to 915.32 metric tons last week, according to data compiled by Bloomberg. While the holdings have contracted 32 percent this year, the pace of monthly outflows has slowed since peaking in April.
Gold is still 18 percent lower this year on speculation that the US Federal Reserve may taper asset purchases that helped gold cap a 12-year bull run last year. A Bloomberg survey this month showed 65 percent of economists expect the Fed to cut the $85-billion of monthly asset purchases from September.
Bullion may climb to $1,450 an ounce by the end of the year on rising physical demand across Asia, according to the median estimate of a Bloomberg survey of 11 traders, jewellers and analysts at the India Gold Convention in Jaipur on August 16-17.
Gold for December delivery rose as much as 1 percent to $1,384.10 an ounce on the Comex in New York, the highest since June 18, before trading at $1,380. Speculators raised net-long positions, or wagers on rising prices, by 18 percent to 56,604 futures and options by August 13, as the 17 percent drop in short bets exceeded the three-percent fall in long ones, CFTC data show.
Silver for immediate delivery rose 0.2 percent to $23.308 an ounce, extending last week’s 13 percent gain, the biggest weekly rise since September 2008.
Assets in silver-backed ETPs expanded to a record 19,967.8 tons on August 16, according to data tracked by Bloomberg. One ounce of gold bought as little as 58.5405 ounces of silver today, the least since April 17, as investors sought holdings of a metal that may also benefit from economic growth.
Spot platinum fell 0.5 percent to $1,517.90 an ounce after capping a sixth weekly increase last week, the longest such run since February 2012. Palladium dropped 0.5 percent to $758.60 an ounce, after last week gaining for a third week. - Bloomberg