By Chanyaporn Chanjaroen - Jun 10, 2013 6:50 AM GMT+0400
Gold gained, paring last week’s decline, as investors bought the precious metal as a haven asset after China’s data trailed forecasts, sparking a selloff in industrial raw materials.
Spot gold advanced as much as 0.4 percent to $1,388.41 an ounce before trading at $1,386.04 as of 10:48 a.m. Singapore time. Prices ended down 2.2 percent on June 7, the worst close since May 15, after data showed U.S. employers took on 175,000 workers in May, beating the 163,000 median forecast in a Bloomberg survey. Silver increased as much as 0.9 percent today.
China’s industrial output rose a less-than-forecast 9.2 percent in May from a year earlier and factory-gate prices fell for a 15th month, while export gains were at a 10-month low and imports dropped, data released over the weekend show. That sent copper and rubber down. Gold has dropped 17 percent this year, entering a bear market in April as economic optimism increased speculation that the U.S. Federal Reserve may scale back its monetary stimulus.
“Investors are cutting copper and some other agricultural commodities because of the China data and buying gold instead,” Chae Un Soo, a metals trader at Korean Exchange Bank Futures Co. in Seoul, said by phone today. He expects gains to be capped at $1,420 this week amid speculation on the Fed’s stimulus policy.
Alan Greenspan, a former Fed chairman, said on CNBC television last week that the central bank needs to begin cutting back on its unprecedented asset purchases and move toward stopping them altogether. The central bank currently buys $85 billion of Treasury and mortgage debt a month.
Speculators raised their net-long position on gold by 19 percent to 57,113 futures and options by June 4, the highest in seven weeks, U.S. Commodity Futures Trading Commission data show.
Gold held in exchange-traded products fell 1.3 metric tons to 2,135.866 tons as of June 7, the lowest since May 2011, according to data compiled by Bloomberg.
Cash silver traded 0.5 percent higher at $21.7715 an ounce after declining 4.4 percent on June 7, the biggest drop at close since April 15. Spot platinum lost 0.3 percent to $1,497.10 an ounce and palladium fell 0.2 percent to $755.90 an ounce.
To contact the reporter on this story: Chanyaporn Chanjaroen in Singapore atcchanjaroen@bloomberg.net
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