Gold rose for a second day on speculation that the biggest drop in three decades will prompt some investors and central banks to buy the precious metal. Silver advanced.
Gold for immediate delivery gained as much as 0.7 percent to $1,377.55 an ounce and was at $1,372.80 by 7:38 a.m. in Singapore. Prices touched $1,321.95 yesterday, the lowest since January 2011 before rallying 1.5 percent. Bullion dropped 9.1 percent on April 15, the most since 1983.
The price slump gives central banks an opportunity to buy, Central Bank of Sri Lanka Governor Ajith Nivard Cabraal said yesterday, while the Bank of Korea said bullion’s drop isn’t a big concern because holdings are part of a long-term strategy. Gold, which gained sixfold in a 12-year rally through last year, is down 18 percent in 2013 as the U.S. recovery gained momentum and some Federal Reserve policy makers signaled that stimulus may be scaled back, curbing demand for the metal as a haven.
“Buying interest near $1,320 in gold underpins a relief rally toward $1,425 to $1,455,” Barclays Plc analysts, including Jordan Kotick and Dhiren Sarin, wrote in a report dated yesterday. At those levels the bank will “look for a top and further weakness,” the report said.
Gold for June delivery dropped as much as 1.3 percent to $1,369.70 an ounce on the Comex after rallying 1.9 percent yesterday. Silver for immediate delivery gained 0.6 percent to $23.535 an ounce from as low as $22.07 yesterday, the cheapest since October 2010.
Spot palladium advanced 0.3 percent to $679.05 an ounce, while platinum rose 0.2 percent to $1,450.75 an ounce.
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