Gold climbed to the highest level in three weeks on signs of increased physical and investment demand as the dollar weakened. Silver gained to a two-month high, while platinum and palladium advanced.
Spot gold rallied as much as 0.8 percent to $1,346.61 an ounce, the highest price since July 24, and traded at $1,342.78 at 9:24 a.m. in Singapore. Today’s advance came even as a U.S. filing showed billionaire John Paulson had reduced his holding in the SPDR Gold Trust by 53 percent in the second quarter. Bullion advanced 1.1 percent yesterday as the Bloomberg U.S. Dollar Index retreated for the first time in three days.
Assets in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, climbed yesterday to 913.23 metric tons after gaining on Aug. 9 for the first time in two months. In China, the second-largest consumer, the volume for Shanghai’s benchmark spot contract increased to 10,739 kilograms yesterday, the most since Aug. 6, according to the Shanghai Gold Exchange. Gold is heading for a second monthly advance after rising 7.4 percent in July, the best gain since January 2012.
“Gold is benefiting from a weaker dollar,” said Wang Xiaoli, chief investment strategist at CITICS Futures Co., a unit of China’s biggest listed brokerage. “The SPDR is beginning to show signs of life again but it’s too early to tell if the liquidation that has hurt gold this year is over. Physical demand, especially in Asia, remains supportive.”
While holdings in the SPDR have fallen 32 percent this year, wiping out $33.4 billion of the fund’s value, they are on course for their first weekly increase since December. The 13F filings yesterday also showed that billionaire George Soros sold his entire position in the SPDR in the three months to June.
Bullion for December delivery rose as much as 0.9 percent to $1,345.90 an ounce on the Comex in New York, the highest level since July 24, before trading at $1,341.20. Prices are rising for the sixth day in seven.
Gold slumped 20 percent this year as some investors lost faith in the metal and sold it at record pace from ETPs on speculation that the Federal Reserve will scale back its $85 billion in monthly bond buying as the U.S. economy recovers.
Silver for immediate delivery gained as much as 0.7 percent to $22.021 an ounce, the highest since June 17, before trading at $21.9995. The metal is up for a seventh day in the longest winning run since January.
Spot platinum climbed as much as 0.9 percent to $1,517.85 an ounce, the highest level since June 7. The metal traded at $1,514.90, increasing for a third day. Palladium advanced as much as 1 percent to $747.30 an ounce, matching the highest price on July 29.
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