Gold Nears Six-Month High Before Fed Meeting; Platinum Advances

Gold climbed for a second day before a Federal Reserve policy meeting that may introduce more stimulus to boost the world’s largest economy. Platinum is poised for the longest rally in more than a year.

Cash gold rose as much as 0.3 percent to $1,736.45 an ounce, and traded at $1,735.30 at 11:20 a.m., extending yesterday’s 0.3 percent gain as the dollar fell. The metal touched $1,741.70 on Sept. 7, the most expensive since Feb. 29. Holdings in bullion- backed exchange-traded products expanded to a record 2,487.361 metric tons yesterday, data compiled by Bloomberg show.

The Federal Open Market Committee starts a two-day meeting today amid speculation it will introduce a third round of so- called quantitative easing, or QE, sending the dollar to a four- month low against the euro yesterday. The central bank bought $2.3 trillion of debt in two rounds of QE from December 2008 to June 2011, helping gold almost double in that period.

“Prices were higher on speculation that the Federal Reserve will announce additional stimulus,” Lachlan Shaw, an analyst at Commonwealth Bank of Australia, wrote in an e-mail. “Prices also increased as the U.S. dollar weakened.”

Policy makers are acting to bolster their economies as Europe’s fiscal crisis hurts global growth. Chinese Premier Wen Jiabao signaled yesterday that there’s more room for fiscal and monetary policy to support growth. Fifteen of 16 economists in a Bloomberg News survey expect South Korea’s central bank to cut interest rates tomorrow for the second time this year.

Platinum Gains

Spot platinum advanced for a ninth day in the longest winning streak since August 2011 as labor unrest in South Africa, the world’s largest producer, threatened supplies and investors boosted ETP holdings near a record. The metal gained as much as 0.5 percent to $1,613.50 an ounce, the highest price since April 10, and traded at $1,608.

Workers at Lonmin Plc’s Marikana operation refused to return to work after meeting government mediators, extending a strike that’s into its second month. Holdings in exchange-traded products have increased 14 percent to 45.7269 tons this year, and are within 1.3 percent of last year’s all-time high.

Cash palladium dropped 0.6 percent to $666.25 an ounce, snapping eight days of gains. The metal climbed to $678.85 yesterday, the highest price since May 2.

Silver rose for a second day, adding as much as 0.6 percent to $33.6925 an ounce, and traded at $33.6263.

To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net

To contact the editor responsible for this story: Jake Lloyd-Smith at jlloydsmith@bloomberg.net

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