Gold Accelerates As Demand Jumps 11-Feb-2014

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images (8)Gold futures accelerated near $ 1290 an ounce in the Asia electronic session today boosted by the jump in the physical demand in China market following the recent Lunar New Year holiday.

Gold for April delivery is trading up $9.6 at $ 1284.3 an ounce on the Comex division of the New York Mercantile Exchange. Yesterday, it advanced $11.80, or 0.9%, to settle at $1,274.70 an ounce.

March silver also extended gains, trading up $0.028 at $ 20.140 an ounce in the electronic trades today. Yesterday, it rose 18 cents, or 0.9%, to $20.11 an ounce.

The metal continued to move up despite sharp gains in the US equities. The Standard & Poor’s 500 Index (SPX) closed 0.2% higher at 1,799.84. The S&P 500 gained 0.8% last week after three straight weekly declines.

The Fed has reduced its monthly buying of bonds to $65 billion from $85 billion. Three rounds of stimulus from the central bank have helped push the S&P 500 as much as 173% higher from a 12-year low in 2009 to its latest record on Jan. 15.

The yellow metal also got a strong boost after china gold demand showed solid rise. For 2013, China saw record production and consumption of gold, according to the China Gold Association. China’s 2013 gold consumption topped 1,000 tons for the first time, climbing 41% from a year earlier to reach roughly 1.8 tons. Separately, the association reported that China’s gold output rose 6.2% in 2013 to a record 428.16 tons.

MCX April bullion futures may open today’s session near Rs 29000 with resistance near Rs 29100 levels.

The U.S. economic calendar this week is relatively sparse, though retail sales and consumer sentiment are on tap. Also, Federal Reserve Chairwoman Janet Yellen is due to testify Tuesday in front of the House Financial Services Committee, her first appearance since taking over for Ben Bernanke.