Gold Trades Steady After Slumping Last Week; Platinum Retreats

  • Falling grades will prevent new mining projects going ahead
  • Investors add to holdings in gold-backed ETPs on Friday

Gold was little changed after falling last week, while platinum declined.

Bullion for immediate delivery rose 0.1 percent to $1,089.58 an ounce as of 2:36 p.m. in New York, according to Bloomberg generic pricing. The metal slid 1.4 percent last week.

Gold has gained in 2016 as China’s economic slowdown triggered global market turmoil and sparked demand for haven assets. Prices are rebounding since touching a five-year low in December that left the commodity near its cost of production. That slump, in addition to falling ore grades, will prevent new mining projects from going ahead, according to Carole Ferguson, an analyst at SP Angel Corporate Finance LLP.

There is a strong likelihood that prices “will move up gently from here” due to a tapering off in supplies, Ferguson said by phone from London. “That might just coincide with the interest in gold as a risk hedge.”

Gold investors have grappled with fluctuations in global equities this year, driven by weakness in China and sinking crude prices. Gains were tempered Monday after Chinese equities rebounded and oil pared some of its losses.

Investors added to gold holdings in exchange-traded products for the sixth time in seven days. Assets rose 4.4 metric tons to 1,489.1 tons as of Friday, the highest level since the start of December, data compiled by Bloomberg show.

Gold stocks extended gains, with the five-member FTSE/JSE Africa Gold Mining Index rising 2.4 percent to lift a rally since the beginning of the year to 33 percent. Newcrest Mining Ltd. gained 0.9 percent at the close of trade in Sydney.

Spot silver rose, while platinum fell as much as 1.4 percent and reached the lowest price since 2008. Palladium was little changed. U.S. markets were shut for a public holiday.

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