Gold Jumps, Trimming Weekly Loss, on Physical Demand in Asia

Gold climbed, paring a fourth weekly decline, as rising physical demand from Australia to China countered outflows from exchange-traded products. Silver headed for the worst week in almost 19 months.

Gold for immediate delivery rose as much as 2.6 percent to $1,426.05 an ounce and was at $1,417.20 by 2:31 p.m. in Singapore. Prices have declined 4.5 percent this week, slumping to $1,321.95 on April 16, the lowest since January 2011.

Gold plunged 14 percent in two sessions through April 15 on growing optimism that an economic recovery in the U.S. will curb appetite for the precious metal as a haven. Prices also dropped on concern Cyprus may lead other European states in selling the metal from reserves, according to Goldman Sachs Group Inc. Retail sales and jewelry demand soared in India and China, while the U.S. Mint sold 153,000 ounces of American Eagle gold coins in April, the highest in almost three years.

“We are already seeing a strong response to the fall in prices, with a sharp pick-up in physical gold sales by investors and retail consumers in the two key consumer markets -- India and China,” Mark Pervan, global head of commodity strategy at Australia & New Zealand Banking Group Ltd., said in a note today. A stabilization and fresh buying of ETPs may “restore some of the lost confidence” for long-term investors, he said.

Holdings in exchange-traded products backed by bullion decreased for a 13th day to 2,348.099 metric tons, the lowest since January 2012, according to data compiled by Bloomberg. Assets in the SPDR Gold Trust, the biggest ETP, were at the lowest in three years.

Indian Rush

Gold will rebound from its two-year low and rally as much as 29 percent by December as skepticism over the recovery in the global economy increases demand, according to billionaire Indian jeweler T.S. Kalyanaraman. Bullion will gain to $1,800 an ounce, Kalyanaraman, chairman of Kalyan Jewellers, said in an e-mail.

A rush in India to buy gold jewelry and coins will boost imports this quarter as traders and banks run out of stockpiles, Mohit Kamboj, president of the Bombay Bullion Association Ltd., said yesterday. Daily customer traffic in Hong Kong and Macau rose as much as 25 percent April 13-16, said Chow Tai Fook Jewellery Group Ltd., the world’s largest jewelry chain.

“We’ve seen enormous numbers of people and they’re all buying,” said Nigel Moffatt, treasurer of Australia’s Perth Mint, which refines nearly all of the nation’s bullion. “There’s been continued buying interest, particularly into China,” he said on Bloomberg Television today.

Gold for June delivery rose as much as 2.3 percent to $1,424.70 an ounce on the Comex. Prices touched $1,321.50 on April 16, the lowest since January 2011.

Silver for immediate delivery climbed 1.9 percent to $23.715 an ounce, heading for a weekly slump of 8.8 percent, the biggest such drop since September 2011. Prices reached $22.07 on April 16, the cheapest since October 2010.

Spot palladium rose 1.2 percent to $677.30 an ounce, trimming a third weekly decline. Platinum advanced 1.4 percent to $1,443, poised for a sixth weekly drop.

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