Gold Rallies From Lowest Since 2010 on Signs Slump Was Excessive

Gold climbed from the lowest level since 2010 on signs that the metal may be oversold and as the dollar retreated from a five-year high. Assets in the largest bullion-backed exchange-traded product extended their decline.

Gold for immediate delivery rose as much as 0.6 percent to $1,147.10 an ounce after trading within 29 cents of a four-year low, and was at $1,144.65 at 3:17 p.m. in Singapore, according to Bloomberg generic pricing. The metal yesterday fell to $1,137.94, the lowest since April 2010. The 14-day relative strength index was below 30 for a fifth day, signaling to some investors that prices will rebound.

The Bloomberg Dollar Spot Index fell 0.2 percent today as the yen rose from a seven-year low. Japan’s currency weakened against the greenback after the central bank unexpectedly boosted stimulus last week just as the Federal Reserve ended asset purchases. Holdings in the SPDR Gold Trust shrank for a second day yesterday to the smallest since September 2008 as U.S. stocks rallied to records, curbing demand for a haven.

“About the only bullish variable that we would cite at the moment is that both gold and silver are extremely oversold,” Edward Meir, an analyst at INTL FCStone Inc., wrote in a note. “We therefore could see a rather short-lived but sharp, technical bounce.” The RSI was at 20.2 yesterday, the lowest since June 2013.

Gold for December delivery fell 0.2 percent to $1,143.90 an ounce on the Comex in New York after most-active prices retreated to $1,137.10 yesterday, the lowest level since April 2010. Almost $1.9 billion was erased yesterday from the value of precious metals-backed funds.

Jobs Data

A report tomorrow may say employers in the U.S. added 235,000 jobs in October, and the jobless rate held at a more than six-year low of 5.9 percent, supporting the case for higher borrowing costs. Bank of Japan Governor Haruhiko Kuroda said yesterday he saw no limit to the steps the BOJ may take to spur inflation. The European Central Bank sets policy today.

Silver for immediate delivery rose 0.1 percent to $15.3564 an ounce after falling 0.7 percent. Prices slumped to $15.1565 yesterday, the lowest since February 2010, capping a sixth day of losses that was the longest such run since April 2013.

An ounce of gold bought as much as 75.1862 ounces of silver yesterday, the most since January 2009. The ratio was at 74.5327 today.

Spot platinum climbed 0.2 percent to $1,206.78 an ounce after the price fell yesterday to $1,197.13, the lowest since Oct. 6. Palladium fell 0.1 percent to $757.25 an ounce.

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