Oct. 21 (Bloomberg) -- Gold gained for the first time in five days, trimming its worst weekly performance in a month, as optimism that European leaders have a plan to fight the region’s debt crisis drove commodities higher.
Bullion for immediate delivery advanced as much as 0.6 percent to $1,630.30 an ounce and traded at $1,625.88 at 2:55 p.m. in Singapore. The metal is down 3.3 percent this week, the biggest drop since the week ending Sept. 23. December-delivery gold also gained for the first day in five, climbing as much as 1.2 percent to $1,631.50 on the Comex in New York.
“Uncertainty in the gold market has led to shifts from day to day as the yellow metal moves with base metals on risk-off, trading more like a commodity, and then moves with U.S. dollars as investors seek safe-haven assets,” James Steel, an analyst at HSBC Securities USA Inc., wrote in a note. “This could continue in the short term.”
Asian stocks gained and three-month copper on the London Metal Exchange advanced for the first time in five days as two people familiar with the matter said that European governments may pool as much as 940 billion euros ($1.3 trillion) to stem the crisis. German Chancellor Angela Merkel and French President Nicolas Sarkozy said in a joint statement yesterday that they want leaders to agree on an “ambitious” plan.
Gold is in the 11th year of a bull run, the longest rally since at least 1920 in London, as investors seek to diversify away from equities and some currencies, as well as hedge against accelerating consumer prices.
December-delivery bullion on the Shanghai Futures Exchange advanced for the first day in four, gaining 0.8 percent to 335.37 yuan a gram ($1,633 an ounce). Immediate delivery gold of 99.95 percent purity, the benchmark cash contract, gained 0.7 percent to 336.80 yuan a gram on the Shanghai Gold Exchange.
“Chinese buyers have been quite active these few days,” said Liu Yangyi, a manager at China National Pearl Diamond Gem & Jewelry Import & Export Corp. The company is a member of the Shanghai Gold Exchange, China’s largest physical market. “Higher prices this year haven’t deterred them,” Liu said.
In China, the world’s second-biggest gold consumer, demand typically picks up during the National Day holidays at the start of October and lasts through the Lunar New Year in January.
Cash silver climbed as much as 1.3 percent to $31 an ounce before trading at $30.72 an ounce. Spot platinum gained as much as 0.9 percent to $1,508 an ounce and last traded little changed at $1,494 an ounce. Palladium rose 1.5 percent to $596.25 an ounce.
--With assistance from Phoebe Sedgman in Melbourne. Editors: Thomas Kutty Abraham, Ovais Subhani
To contact the reporter for this story: Glenys Sim in Singapore at firstname.lastname@example.org
To contact the editor responsible for this story: James Poole at email@example.com