July 26 (Bloomberg) -- Gold headed for the longest weekly rally since March as U.S. economic data backed the case for sustained monetary stimulus. Russia and Kazakhstan added bullion to reserves for a ninth month in June.
Spot gold gained as much as 0.6 percent to $1,341.20 an ounce, and traded at $1,334.15 at 3:17 p.m. in Singapore. Prices are 2.9 percent higher this week after advancing to a one-month high of $1,348.65 on July 24. Volumes for Shanghai’s benchmark spot bullion contract climbed to a one-week high of 14,618 kilograms yesterday.
Gold is up 8.1 percent in July, heading for the best month since January 2012, as the Bloomberg Dollar Index retreated 1.6 percent after Federal Reserve Chairman Ben S. Bernanke said it’s too early to decide whether to begin scaling back bond purchases. Data this week showed while sales of new U.S. homes rose in June to a five-year high, claims for jobless benefits climbed.
“We’ve just seen a bit of market reaction to some recent events and there’s some near-term bullishness,” Justin Smirk, senior economist at Westpac Banking Corp., said by phone from Sydney. “We’ve been seeing the extra liquidity being kicked along all these years but those days are past us. Central bank buying might give us a little bit of a floor, but they’re just soaking up some of what the ETFs are selling.”
Russian holdings, the seventh-largest by country, climbed 0.3 metric tons to 996.4 tons in June, International Monetary Fund data showed. Kazakhstan’s hoard grew 1.4 tons to 130.9 tons. Assets in the SPDR Gold Trust, the biggest exchange-traded product backed by the metal, fell to 927.35 tons yesterday, after being unchanged on July 24. Holdings shrank 4.3 percent in July, set for a seventh month of losses.
Gold for December delivery increased as much as 0.9 percent to $1,340.90 an ounce on the Comex in New York, before trading at $1,334.60, also set for a third week of gains.
Silver for immediate delivery fell 0.4 percent to $20.166 an ounce, after earlier climbing as much as 0.5 percent, paring a weekly gain. The metal has risen 2.6 percent in July, set for the first monthly increase since January.
Spot platinum dropped 0.4 percent to $1,444.85 an ounce, trimming a third week of advances and the first monthly gain since January. Palladium fell 0.3 percent to $736.55 an ounce, set for the first weekly loss in a month.
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