Gold Advances for Second Day as Investors in `Risk-Off' Modeby and
Metal has seen average 4.4% climb in January over past decade
Middle East tension, share declines spur haven demand for gold
Gold rallied a second day at the start of a month that’s been the strongest for the metal in recent years. Bullion rose on Tuesday as Middle East tensions helped spur haven demand.
“At the beginning of the year, people tend to look at different areas of investment, and gold is at an attractive level,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said in a telephone interview. “There’s enough uncertainty as we start the new year, and people feel that gold is a safety vehicle.”
Gold for immediate delivery headed for its first back-to-back gain in two weeks, climbing 1.6 percent so far in January to $1,078.47 an ounce by 2:43 p.m. in New York, according to Bloomberg generic pricing. Prices have been helped by declines on Monday in world equities and the tension between Iran and Saudi Arabia, which boosted demand for a store of value. The metal fell a third straight year in 2015, touching a five-year low.
Bullion has advanced 4.4 percent on average in January over the past 10 years, climbing in all but three cases. Its performance in the first month beats that in any other. January is a time when Chinese shoppers stock up on gold in anticipation of the Lunar New Year.
Gold futures for February delivery rose 0.3 percent to settle at $1,078.40 an ounce on the Comex in New York. The metal climbed as much as 2.2 percent on Monday to a three-week high.
Holdings in gold exchange-traded products fell to 1,463.4 tons on Monday, near the lowest in more than six years, according to data compiled by Bloomberg. The assets shrank 136 tons in 2015 in a third year of contraction.
Spot silver advanced 1 percent to $14.0136 an ounce. Palladium fell, while platinum advanced.