Global equities climbed to the highest level in more than two weeks. Federal Reserve Chairman Janet Yellen said yesterday that while the recovery in the U.S. labor market is “far from complete,” stimulus would be cut in “measured steps.” Bullion rose 70 percent from December 2008 to June 2011 as the Fed pumped more than $2 trillion into the financial system.
Gold slid the most since 1981 last year as some investors lost faith in the metal as a store of value. It rebounded 6.7 percent this year amid a sell-off in emerging-market currencies and rising physical demand, even as the Fed continued cutting monthly bond buying. Volumes for Shanghai’s benchmark spot gold contract fell for second day after reaching a nine-month high on Feb. 10 as consumers returned from a weeklong holiday.
“Gold seems to be weighed down by the ease in safe-haven flows,” Abhishek Chinchalkar, an analyst at Mumbai-based AnandRathi Commodities Ltd., said in today a report. “With prices rising to a three-month high, this should further deter demand from China.”
Bullion for immediate delivery fell 0.4 percent to $1,285.97 an ounce by 9:48 a.m. in London. It reached $1,293.93 yesterday, the highest since Nov. 14, gaining for a fifth day in the longest streak since August. Gold for April delivery lost 0.3 percent to $1,286 on the Comex in New York, where futures trading volume was 18 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed.
The Fed said in January it will cut monthly bond purchases by $10 billion to $65 billion. Yellen repeated yesterday the central bank’s statement that asset purchases aren’t on a “pre-set course.” The Bloomberg Dollar Spot Index, a measure against 10 major currencies, was near a four-week low set yesterday.
Stocks also climbed after Chinese exports jumped 10.6 percent in January from a year earlier, eclipsing an estimate for a 0.1 percent gain, while imports accelerated 10 percent and the trade surplus widened.
Holdings in gold-backed exchange-traded products rose for a second day yesterday, increasing 0.4 metric ton to 1,738.3 tons, data compiled by Bloomberg show. Assets reached a four-year low of 1,736 tons last month.
“Physical buyers are very sensitive to price changes so it’s no surprise if demand slows,” said Lv Jie, an analyst at Cinda Futures Co., a unit of one of four funds in China created to buy bad debt from banks. “ETF flows appear to be stabilizing.”
Silver for immediate delivery fell 0.4 percent to $20.1492 an ounce, after an eight-day advance that was the longest since Aug. 16. Palladium rose 0.5 percent to $722.67 an ounce, set for a sixth day of gains that would be the longest winning streak since July. Platinum added 0.3 percent to $1,393.50 an ounce.
Talks to end a strike over pay that has crippled production at the world’s largest platinum mines in South Africa have been delayed to Feb. 13 after the companies requested more time.