Gold Trades Near One-Month High as Investors Weigh Demand

Gold fluctuated after advancing to a one-month high as investors assessed the impact of the rally on demand. Platinum climbed to the highest level in two months on concern that miners in South Africa may strike over wages.

Bullion for immediate delivery rose and fell 0.3 percent, before trading 0.1 percent lower at $1,251.57 an ounce by 9:45 a.m. in Singapore. Prices earlier climbed to $1,257, the highest since Dec. 12, and a fourth day of gains would be the longest rally since October. Platinum was little changed after increasing to $1,446.75, the highest level since Nov. 15.

Gold has rebounded from a six-month low of $1,182.27 on Dec. 31, when it capped the largest annual decline since 1981, on signs of strengthening demand in China. The country probably overtook India as the largest user last year. Volumes for the benchmark contract on the Shanghai Gold Exchange fell to 14,630 kilograms yesterday, compared with an eight-month high of 24,875 kilograms a week ago.

“Physical demand is very price-sensitive, especially at the retail level,” said Lv Jie, an analyst at Cinda Futures Co. “While that has helped gold hold up so far this year, we may see some of that demand drop off as prices climb.”

Gold for February delivery was little changed at $1,251.40 an ounce on the Comex in New York, in trading volume that was 33 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed.

Gold Coins

Data from the U.S. Mint showed gold-coin sales were 63,000 ounces yesterday, topping the 56,000 ounces sold in all of December. The U.K.’s Royal Mint last week said it ran out of 2014 Sovereign gold coins on “exceptional demand.” Assets in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, were unchanged for a third day yesterday after sliding to a five-year low of 793.12 metric tons on Jan. 8.

Platinum traded at $1,443.55 an ounce. The most powerful union at the world’s three biggest platinum producers plans meetings with its members this week in South Africa to test whether workers want to strike over pay.

Silver dropped 0.3 percent to $20.3368 an ounce after climbing to $20.4657 yesterday, the highest since Dec. 11. Palladium traded at $740 an ounce from $740.05 yesterday, when the metal rose to $746.65, the highest price since Nov. 12.

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

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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