Gold traded near the highest level in almost two weeks on prospects for additional stimulus from central banks in Europe and Japan and signs of increased physical demand in Asia.
Spot gold traded at $1,593.45 an ounce at 2:29 p.m. in Singapore from $1,592.80 yesterday, when it climbed to $1,598.80, the highest intraday price since Feb. 28. Gold for April delivery was little changed at $1,591.90 an ounce on the Comex after four days of gains, the best run since August.
The European Central Bank will maintain its accommodative stance “as long as necessary,” according to Jens Weidmann, an ECB council member and head of Germany’s Bundesbank. A report yesterday that showed industrial output fell in January boosted speculation the Bank of England may add to stimulus. In Japan, two opposition parties said today they will endorse Kikuo Iwata for Bank of Japan deputy governor, increasing the likelihood Prime Minister Shinzo Abe will win confirmation for his pro-stimulus central-bank nominees as he seeks to end deflation.
“Easier global monetary policies have positive ramifications for bullion,” Howard Wen, an analyst at HSBC Securities (USA) Inc., wrote in a note. “The key support for bullion prices has been the emergence of Chinese physical buyers. Indian merchants noted that demand may pick up in April on the resumption of the wedding and festival season.”
Daily volumes for the benchmark cash contract on the Shanghai Gold Exchange have been more than double the average in 2012 since Feb. 18, when it reached a record 22,024 kilograms, according to bourse data.
Spot gold is down 4.9 percent this year amid speculation that the U.S. Federal Reserve may rein in its stimulus as the recovery in the largest economy gains traction. Data today may show U.S. retail sales advanced in February for a fourth month. Assets in gold-backed exchange-traded products dropped to 2,472.891 metric tons yesterday, the lowest since September.
ETP holdings are a so-called key variable to watch, showing how committed investors are to gold, Diego Parrilla, chief investment officer of Singapore-based Nareco Advisors, said at a conference in the city-state today.
Cash silver was little changed at $29.16 an ounce and spot platinum fell 0.3 percent to $1,591.25 an ounce. Palladium lost 0.4 percent to $769.50 an ounce, declining for a third day.