Gold Has Longest Rally in Four Weeks on China Outlook
Gold futures rose, capping the longest rally in four weeks, as demand surged in China, the world’s second-biggest consumer of the metal last year. Silver jumped to a seven-week high.
The China Gold Association said today that purchases rose 54 percent to 706.4 metric tons in the first half from a year earlier. Demand surged 87 percent for bars and 44 percent for jewelry demand. Last month, futures in New York jumped 7.3 percent, the most since January 2012.
“Physical demand, especially out of China, continues to support prices,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. “The sentiment is bullish today.”
Gold futures for December delivery rose 1.7 percent to settle at $1,334.20 an ounce at 1:42 p.m. on the Comex in New York. The metal climbed for the fourth straight session, the longest rally since July 11. Earlier, the price reached $1,343.70, the highest for a most-active contract since July 24.
This year, China may overtake India as the top consumer.
On Aug. 9, holdings in the SPDR Gold Trust, the biggest exchange-traded product backed by the metal, rose 0.2 percent to 911.13 tons, the first increase in 60 days, data compiled by Bloomberg show. Assets have tumbled 33 percent this year as some investors lost faith in the commodity as a store of value amid a U.S. equity rally and low inflation.
Silver futures for September delivery climbed 4.6 percent to $21.339 an ounce on the Comex. Earlier, the price reached $21.395, the highest since June 19. The metal advanced for the third straight session, the longest rally since July 11.
This year, silver has slumped 29 percent, and gold has dropped 20 percent.
On the New York Mercantile Exchange, platinum futures for October delivery fell 0.1 percent to $1,498.70 an ounce. Palladium futures for September delivery declined 0.5 percent to $737.60 an ounce.
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