June 28 (Bloomberg) -- The spot price of gold rebounded from a 34-month low, jumping the most in a month, on signs of increased demand for jewelry, coins and bars after the metal headed for the biggest quarterly drop in at least 93 years.
“We did see physical buying come in a bit, and if that continues it will provide some support,” Marc Ground, a commodity strategist at Standard Bank Plc in Johannesburg, said in a telephone interview. Bullion for immediate delivery in London slid 23 percent this quarter, poised for the largest decline since 1920, when Bloomberg data starts. Standard Chartered Plc advised buying gold around $1,200 an ounce.
“There is definitely some increase in the pace of physical purchases,” Matt Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. “We are also seeing some short covering after prices started rising.”
Gold for immediate delivery advanced 2.2 percent to $1,227.05 at 3:06 p.m. New York time, heading for the biggest gain since May 20. Earlier, the price touched $1,180.50, the lowest since August 2010.
On the Comex in New York, gold futures for August delivery rose 1 percent to settle at $1,223.70. Trading was 66 percent above the average in the past 100 days for this time, according to data compiled by Bloomberg.
China should buy gold to back the internationalization of its currency, Sun Zhaoxue, president of China National Gold Group Corp., said at a forum in Shanghai today. Sales were about 800 metric tons in the first half of the year, nearing last year’s total, Sun said.
Bullion slid 27 percent this year, set for the biggest annual drop since 1981, after rallying in each of the past 12 years. About $61 billion was wiped from the value of exchange-traded products backed by gold this year as some investors lost faith in them as a store of value and a lack of accelerating inflation.
Spot silver jumped 5.5 percent to $19.5093 an ounce, while prices in New York settled at $19.47, up 4.9 percent. Today’s jump narrowed the precious metal’s annual drop to 36 percent, which is the biggest slide among 24 commodities tracked by the Standard & Poor’s GSCI Spot Index.
On the New York Mercantile Exchange, platinum futures for October delivery rose 0.8 percent to $1,339.90 an ounce. The metal dropped 8.3 percent this month, making it the biggest decline since May 2012. Palladium futures for September delivery advanced 1.5 percent to $660.70 an ounce, paring this month’s slump to 12 percent. For the quarter, prices are down 14 percent, the biggest drop since September 2011.
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