Gold futures rose the most since June following purchases by central banks and signs of increasing investor demand on the heels of last week’s biggest plunge in three decades. Silver posted the biggest gain in 15 months.
Russia and Kazakhstan expanded gold reserves in March for the sixth straight month, International Monetary Fund data show. The volume for the Shanghai Gold Exchange’s benchmark contract has been more than four times last year’s daily average every day since April 16, while monthly coin sales by the U.S. Mint are heading for the highest since December 2009.
“News about central banks buying is very bullish,” Michael Smith, the president of T&K Futures & Options Inc. in Port St. Lucie, Florida, said in a telephone interview. “Prices are roaring higher with reports of increased physical buying worldwide.”
Gold futures for June delivery jumped 2.7 percent to settle at $1,462 an ounce at 1:21 p.m. on the Comex in New York, the biggest gain for a most-active contract since June 29.
Futures have rebounded 11 percent since dropping to a two-year low of $1,321.50 on April 16. On April 15, the metal plummeted 9.3 percent, the most in 33 years, after entering a bear market on April 12.
After the settlement, gold reached $1,468.60, the highest since April 15, amid concern that tension may escalate in the Middle East after the Obama administration said it has seen some evidence that Syrian government forces used the deadly chemical sarin in the civil war.
The assessment is “not sufficient” to take action, Miguel E. Rodriguez, President Barack Obama’s legislative liaison to Congress, said in a letter to lawmakers dated today.
“Gold got a big push from the Syria news,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates, said in a telephone interview.
Assets held in the SPDR Gold Trust, the largest exchange-traded fund backed by bullion, dropped to a 3 1/2-year low of 1,092.98 metric tons yesterday and have tumbled 11 percent this month.
“Some of the central banks might take this drop as an opportunity to buy as some physical players did,” said Dominic Schnider, the head of commodities research at UBS AG’s wealth-management unit in Singapore. “The ETF selling, which is likely to continue in the short term, just caps the price.”
The U.S. Mint’s gold coin sales have climbed to 196,500 ounces this month from 62,000 in March, data on its website show. The total for December 2009 was 231,500 ounces. The mint said on April 23 that it ran out of its smallest American Eagle coin.
Silver futures surged 5.7 percent to $24.182 an ounce on the Comex, the biggest increase since Jan. 3, 2012.
On the New York Mercantile Exchange, platinum futures for July delivery rose 2.3 percent to $1,464.10 an ounce, the biggest advance since Sept. 12.
Palladium futures for June delivery climbed 2.1 percent to $681.40 an ounce, the largest gain since March 20.