Gold Swings After Advancing Most in a Week as SPDR Resumes Drop

Gold fluctuated after climbing the most in a week as a retreat in the dollar and equities revived demand for an alternative investment. Holdings in the largest exchange-traded product backed by the metal resumed a decline.

Bullion for immediate delivery traded at $1,203.77 an ounce at 3:07 p.m. in Singapore from $1,203.51 yesterday, after earlier losing 0.3 percent and rising 0.2 percent, according to Bloomberg generic pricing. The metal advanced 0.9 percent yesterday for the largest one-day increase since Dec. 1.

The Bloomberg Dollar Spot Index fell from the highest since 2009 before the Federal Reserve meets next week to debate the timing of the first interest-rate increase in eight years, while global stocks declined as crude prices in New York and London sank to five-year lows. Assets in the SPDR Gold Trust contracted yesterday for the first time since Nov. 28 after expanding 0.5 percent last week, the most since August.

“The pause in the dollar’s rally has brought some relief to gold in the short term but prices remain vulnerable in the medium term as a U.S. rate hike is imminent,” Huang Wei, a Shanghai-based analyst at Huatai Great Wall Futures Co., wrote in a note today. “While gold may benefit if equities continue to decline, we recommend investors sell into rallies.”

Gold for February delivery rose 0.8 percent to $1,204.20 an ounce on the Comex in New York after advancing 0.4 percent yesterday. Money managers raised their bullish wagers for a third straight week, the longest expansion since July, government data showed Dec. 5.

Silver for immediate delivery gained 0.4 percent to $16.4241 an ounce, extending yesterday’s 0.5 percent advance. Spot platinum lost 0.4 percent to $1,229.50 an ounce, while palladium was little changed at $800.75 an ounce.

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