Gold climbed to a 19-week high as speculation China’s growth is faltering hurt equities, boosting haven demand as tension in Ukraine escalates. Holdings in the biggest exchange-traded product held at the highest this year.
Bullion for immediate delivery rose as much as 0.8 percent to $1,359.83 an ounce, the highest level since Oct. 29, and traded at $1,357.09 at 11:20 a.m. in Singapore. The metal rose 0.7 percent yesterday as conflict between Ukraine and Russia worsened, extending a fifth weekly gain last week.
Gold advanced 13 percent this year as demand for a store of value increased amid concern that growth in China, the largest consumer, is slowing, while deadly protests in Ukraine hurt emerging-market assets already weakened by cuts to U.S. stimulus. The MSCI Asia Pacific Index of equities sank 1.5 percent today before data tomorrow forecast to show growth in China’s industrial output slowed in February.
“Gold is getting support from geopolitical events and falling equity markets, but there’s little follow-through from physical buyers at these levels,” 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. “Investors continue to watch U.S. economic data for direction.”
Assets in the SPDR Gold Trust were unchanged at 812.7 metric tons yesterday, the highest level since Dec. 20. In China, daily volumes for Shanghai’s benchmark spot contract exceeded the fourth quarter’s daily average of about 11,525 kilograms every day since March 5.
Bullion rebounded this year even as the Federal Reserve, which next meets March 18-19, announced a $10 billion reduction in bond buying at each of its past two meetings, leaving purchases at $65 billion. Crimea is preparing for a March 16 referendum on splitting from Ukraine and joining Russia as Western leaders threaten sanctions.
Gold for April delivery climbed as much as 1 percent to $1,359.90 an ounce on the Comex in New York, and traded at $1,357.20, rising for a third day.
Silver for immediate delivery rose 1.5 percent to $21.1655 an ounce, extending a 0.1 percent gain yesterday.
Platinum added 0.6 percent to $1,473 an ounce, while palladium increased 0.1 percent $769.50 an ounce.
The world’s three biggest platinum companies and the South African union that has paralyzed their operations with a strike said no meetings are scheduled to resolve their seven-week deadlock over pay.