Jan. 17 (Bloomberg) -- Gold advanced to a four-week high after a report showed manufacturing in the Philadelphia area unexpectedly contracted in January, increasing pressure on the U.S. central bank to expand monetary stimulus.
The Federal Reserve Bank of Philadelphia’s general economic index dropped to minus 5.8 from 4.6 in December. Readings lower than zero signal contraction in eastern Pennsylvania, southern New Jersey and Delaware. 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.
“The market is reacting to the manufacturing data,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview. “The market seems to be looking at every single number to speculate on how long the stimulus will continue.”
Gold futures for February delivery gained 0.5 percent to settle at $1,690.80 an ounce at 1:49 p.m. on the Comex in New York, after reaching $1,697.80, the highest for a most-active contract since Dec. 18. Earlier, prices slumped as much as 1 percent after applications for jobless benefits in the week ended Jan. 11 decreased to the lowest since Jan. 19, 2008, Labor Department figures showed.
Prices retreated to a four-month low on Jan. 4 after minutes of a Federal Reserve Bank meeting showed some policy makers favored ending $85 billion in monthly bond purchases this year as the economic recovery gains traction.
Silver futures for March delivery rose 0.8 percent to $31.81 an ounce on the Comex.
On the New York Mercantile Exchange, platinum futures for April delivery gained 0.4 percent to settle at $1,700.50 an ounce, the highest closing price since Oct. 5. 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 fell less than 0.1 percent to $726.15 an ounce on the Nymex, ending a three-day advance.
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