Gold Extends Advance as Wen Comment Boosts Stocks
(Corrects to platinum from gold in penultimate paragraph.)
Gold climbed for a third day, gaining alongside equities and other commodities, before German and French leaders meet today to discuss the euro and as China said it will focus on aiding growth. Platinum and palladium gained.
Spot gold rose as much as 0.3 percent to $1,598.25 an ounce, the highest price since May 10, and was at $1,596.25 at 11 a.m. in Singapore. Bullion last week rebounded after a 21 percent drop from an intraday record in September. The metal ended the week up 0.9 percent, the first weekly advance in three.
Gold dropped to $1,526.97 an ounce on May 16, the cheapest this year, as speculation that Greece may have to leave the currency bloc wiped almost $4 trillion from global stock markets this month. German and French leaders will meet before a European Union summit May 23 to map a revised plan to resolve the debt crisis, after leaders of the Group of Eight nations failed to deliver a unified strategy at their May 18-19 meeting.
“Gold had a really nice rally following a very steep drop, so we might get some consolidation from here as the market prepares to take on $1,600,” said Feng Liang, an analyst at GF Futures Co., a unit of China’s second-largest listed brokerage. “It’s too soon to say if the dollar link has been broken.” Gold tends to trade inversely to the U.S. currency.
June-delivery bullion gained 0.3 percent to $1,596 on the Comex in New York, after climbing 0.4 percent earlier. Holdings in exchange-traded products rose to a three-week high of 2,383.677 metric tons on May 18. The dollar declined against most of its major counterparts as Asian stocks, oil and copper advanced after China’s Premier Wen Jiabao said the country will focus more on bolstering growth, signaling further loosening.
Cash platinum, the year’s best-performing precious metal, gained for a third day, adding as much as 0.9 percent to a one- week high of $1,468.13 an ounce. It was last at $1,463. One ounce of platinum bought 0.9178 ounce of gold today after the so-called ratio dropped to 0.9132 on May 18.
Spot palladium, this year’s worst-performing precious metal, climbed as much as 1.2 percent to $611.50 an ounce and was last at $610. Silver fell for the first time in three days, dropping 0.2 percent to $28.6825 an ounce.
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