Gold Advances as Investor Outflows Slow, Dollar’s Rally Stalls

Gold climbed, extending the first back-to-back weekly gain in four, as outflows in investor holdings slowed and the dollar retreated. Silver, platinum and palladium advanced.

Spot gold gained as much as 0.7 percent to $1,397.90 an ounce and was at $1,395.95 at 2:08 p.m. in Singapore. Prices fell 6 percent last month, including a 1.9 percent decline on May 31, on speculation that the U.S. Federal Reserve may scale back asset purchases, known as quantitative easing, as the world’s largest economy recovers.

Assets in the SPDR Gold Trust, the biggest bullion-backed ETP, were unchanged for a second day on May 31 after expanding on May 29 for the first time in almost three weeks, according to data on the company’s website. Sales from the fund may be largely over, according to Deutsche Bank AG. The Dollar Index, a gauge against six counterparts, dropped as much as 0.3 percent.

“Gold’s getting a lift from the halt in the dollar’s strength as the debate over whether the Fed will continue QE goes on,” said Sun Yonggang, a macroeconomic strategist at Everbright Futures Co., a unit of one of China’s largest state-owned investment companies. “The fall back below $1,400 seems to have lured some buyers. Sales from ETFs appear to be slowing although it’s too soon to draw any conclusion from that.”

Bullion for August delivery gained 0.2 percent to $1,395.30 an ounce on the Comex in New York. Speculators raised their net-long gold position by 35 percent to 48,096 futures and options in the week to May 28, the biggest increase since March 19, U.S. Commodity Futures Trading Commission data show. Most of the gain came from a decline in short bets, or wagers on falling prices, which reached a record a week earlier.

Reduced Holdings

Cash silver climbed as much as 1.1 percent to $22.5118 an ounce and was at $22.415. Prices dropped for a fourth month n May, the longest losing streak since June 2012. Investors reduced holdings in silver-backed ETPs by 2.4 percent in May, the most in two years, according to data compiled by Bloomberg.

Platinum rose 0.6 percent to $1,467.30 an ounce. Holdings in ETPs reached a record 64.22 tons on May 31, according to data compiled by Bloomberg. Palladium advanced 0.3 percent to $751.85 an ounce. Assets in ETPs rose to 66.63 tons on May 31, expanding for the first time in two weeks.

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