Aug. 6 (Bloomberg) -- Gold fluctuated in London amid speculation demand will strengthen as China moves to relax bullion-trading rules and the dollar slumps.
The metal is set for the first weekly climb since the five days ended June 18. China, the world’s biggest gold producer and second-largest buyer after India, said on Aug. 3 it would let more banks import and export bullion and allow foreign companies more access to trading. The dollar slipped to a three-month low against the euro that day and is set for a second weekly drop. Gold usually moves inversely to the greenback.
“The news that came out about China has definitely supported the metal, because people think there could be more demand,” said Alexander Zumpfe, a precious-metals trader at Hanau, Germany-based Heraeus Metallhandels GmbH. A slumping dollar this week also “helps the metal,” he said.
Gold for immediate delivery lost 75 cents, or 0.1 percent, to $1,194.20 an ounce at 11:49 a.m. in London. Prices swung between a gain of 0.3 percent and a drop of 0.2 percent and are up 1.1 percent this week. The metal for December delivery was 0.2 percent lower at $1,196.40 on the Comex in New York.
Bullion rose to $1,194.50 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,192.50 at yesterday’s afternoon fixing. Spot prices reached a record $1,265.30 an ounce on June 21. The dollar gained 0.2 percent against the euro today.
Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, added 0.91 metric ton to 1,282.75 tons yesterday, according to the company’s website. That’s the first increase since July 12. Holdings on July 28 dropped 18.55 tons, the most in more than two years.
“Despite some uneasiness about falling fund inflows, gold is well-supported psychologically from the dollar’s weakness and China’s relaxation of rules on gold trading,” said Park Hyun Seon, a Seoul-based trader with Eugene Investment & Futures Co. “Gold could retain strength, although it may face some selling pressure after recent gains.”
Fourteen of 18 traders, investors and analysts surveyed by Bloomberg, or 78 percent, said the metal will gain next week. Two forecast lower prices and two were neutral.
Silver for immediate delivery in London added 0.1 percent to $18.35 an ounce. Platinum lost 0.4 percent to $1,566.35 an ounce. Palladium fell 1.8 percent to $488.13 an ounce.
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