Gold Trades Near One-Month High as BOJ Announces Stimulus

Gold futures rose in New York after the Bank of Japan (8301) announced stimulus measures, increasing demand for the precious metal as a store of value.

The central bank said today it will buy about 13 trillion yen ($146 billion) in assets per month from January 2014 and set a 2 percent inflation target. Bullion gained 7 percent last year as stimulus programs in the U.S., Europe and Japan enhanced the appeal of the precious metal as an alternative to currencies.

“This is definitely bullish for gold,” James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview.

Gold futures for February delivery rose 0.4 percent to settle at $1,693.20 an ounce at 1:44 p.m. on the Comex in New York. Last week, prices jumped 1.6 percent and climbed to $1,697.80, the highest price for a most-active contract since Dec. 18. The exchange was closed yesterday for a public holiday.

India, the biggest bullion consumer in 2011, raised import duties on gold and platinum to 6 percent immediately from 4 percent. Physical gold purchases will probably slow significantly after being very strong early this year, said Nick Trevethan, senior commodities strategist at Australia & New Zealand Banking Group Ltd. (ANZ)

“We will definitely see the effect of this news on physical demand,” Optionsellers.com’s Cordier said.

Silver futures for March delivery climbed 0.8 percent to $32.177 an ounce in New York.

On the New York Mercantile Exchange, platinum futures for April delivery gained 1.5 percent to settle at $1,698.50 an ounce. The metal has rallied 10 percent this month on concern supplies will tighten. Anglo American Platinum Ltd., the world’s biggest producer, said on Jan. 15 it will cut jobs and output in South Africa.

Palladium futures for March delivery rose 1 percent to $729.90 an ounce on the Nymex, the highest settlement for a most-active contract since Sept. 16, 2011.

To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Debarati Roy in New York at droy5@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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