By Glenys Sim - Apr 25, 2013 6:25 AM GMT+0400
Gold climbed for the seventh time in eight days, rebounding from the biggest slump in three decades, as rising central bank and physical purchases countered falling exchange-traded product holdings.
Gold for immediate delivery rose as much as 0.4 percent to $1,437.22 an ounce, and traded at $1,436.78 by 10:21 a.m. in Singapore, reversing a 0.3 percent decline. Gold reached $1,439.30 on April 22, the highest level since April 15, the second day of a 14 percent slump.
Russia and Kazakhstan expanded gold reserves for a sixth straight month in March, according to International Monetary Fund data. The volume for the Shanghai Gold Exchange’s benchmark contract has been more than four times last year’s daily average every day since April 16, while sales of gold coins by the U.S. Mint are heading for the highest total since December 2009. Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, are set for the largest monthly decline since trading began in 2004.
“Some of the central banks might take this drop as an opportunity to buy as some physical players did,” said Dominic Schnider, head of commodities research at UBS AG’s wealth- management unit. “The ETF selling, which is likely to continue in the short term, just caps the price.”
Bullion has fallen 14 percent in 2013 after climbing for 12 years through 2012, tumbling to a two-year low of $1,321.95 on April 16. Prices are still 8.1 percent below the April 11 close of $1,561.45 an ounce that preceded the slump in two sessions through April 15.
Gold for June delivery rose as much as 0.9 percent to $1,436.50 an ounce on the Comex inNew York, before trading at $1,435.40. The U.S. Mint’s gold coin sales totaled 196,500 ounces as of yesterday, up from 62,000 in March, data on the mint’s website show. The amount for all of December 2009 was 231,500 ounces. The mint said on April 23 it ran out of its smallest American Eagle gold coin.
Cash gold of 99.99 percent purity added 1.4 percent to 294.88 yuan a gram ($1,486.10 an ounce) on the Shanghai Gold Exchange, China’s largest spot bullion market. The contract’s daily volume has topped 20 tons since April 16, compared with last year’s average of about 4.7 tons, exchange data compiled by Bloomberg.
Cash silver gained 0.2 percent to $23.2338 an ounce, while palladium added 0.1 percent to $669.75 an ounce. Spot platinum increased 0.3 percent to $1,434 an ounce, trading below gold.
To contact the reporter for this story: Glenys Sim at gsim4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
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