Gold Swings Between Gains, Losses Amid Signs of U.S. Recovery, Irish Talks

Gold swung between losses and gains amid signs that the U.S. economy may be strengthening while Ireland may have to accept a European Union bailout. Silver climbed after a two-day slump spurred buying.

Immediate-delivery gold was little changed at $1,359.80 an ounce at 4:16 p.m. in Seoul after dropping and gaining as much as 0.3 percent. Spot silver added as much as 1.6 percent to $25.8750 an ounce after losing 8 percent the past two days. December-delivery gold lost 0.7 percent to $1,359.10 an ounce on the Comex in New York.

“Some increase in the U.S. currency is weighing on gold,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “It’s a little bit of profit taking as well at currently high levels.”

The dollar was 0.2 percent higher after earlier losing 0.3 percent against a basket of six major counterparts. The index added 0.6 percent yesterday as an increase in Treasury yields stoked demand for U.S. assets. Gold, which usually moves inversely to the greenback, has gained 24 percent this year.

George Soros, who’s described gold’s surge as the “ultimate asset bubble,” cut his holdings in the SPDR Gold Trust for a third quarter, according to a filing. Rival fund manager John Paulson stuck with his bet by maintaining the largest stake in SPDR Gold, according to a separate filing.

U.S. retail sales rose 1.2 percent in October, the most in seven months, Commerce Department data showed yesterday. Treasury 10-year yields climbed 17 basis points yesterday to 2.96 percent, the highest level since Aug. 5. Industrial output in the U.S. rose 0.3 percent last month after dropping in September, according to a Bloomberg survey before a report today.

EU-Irish Talks

European Union-Irish talks are expected to intensify today at a meeting of euro-area finance ministers in Brussels. Ireland may use EU aid to bail out its cash-strapped banks, the European Central Bank said yesterday. Gold priced in euros reached a record in June on investor concern that Greece would be bankrupt.

“If the European debt concern gets any worse, that would surely support gold,” said Park Jong Beom, a trader at Tong Yang Futures Trading Co. in Seoul.

Hedge-fund managers and other large speculators increased their net-long position in New York gold by 15,951 contracts, or 7 percent, in the week ended Nov. 9 from a week ago, according to U.S. Commodity Futures Trading Commission data.

“The broader macro environment remains supportive,” Suki Cooper, an analyst at Barclays Capital, wrote in a report dated yesterday. “Longer-term exchange-traded product, or ETP, investor interest has been extremely resilient despite the price volatility and sharp drop in prices earlier last week.”

Gold assets in ETPs were little changed at 2,087.52 metric tons yesterday, according to data compiled by Bloomberg from 10 providers. Holdings reached a record 2,104.65 tons on Oct. 14. The metal reached a record $1,424.60 on Nov. 9.

Silver held through four ETP providers was almost unchanged at 14,761.6 tons yesterday after reaching 14,763.8 tons on Nov. 12, the highest amount since at least February, data compiled by Bloomberg show.

Immediate-delivery palladium was little changed at $672.45 an ounce and platinum dropped 0.3 percent to $1,664.50 an ounce.

To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net