Nov. 24 (Bloomberg) -- Gold gained in London on speculation lower prices attracted physical buyers and as a weaker dollar boosted demand for precious metals as an alternative investment.
Demand from Asia is picking up after bullion prices dropped 4.9 percent since Nov. 8. The euro rose as much as 0.5 percent against the greenback after a report showed German business confidence unexpectedly rose for the first time in five months in November. Gold typically moves inversely to the U.S. dollar.
“The physical demand out of Asia, particularly Vietnam and Thailand, is very healthy,” Bernard Sin, head of currency and metal trading at bullion refiner MKS Finance SA in Geneva, said by phone today. “We are cautiously bullish.”
Bullion for immediate delivery gained 0.4 percent to $1,698.55 an ounce by 12:05 p.m. in London, after dropping 0.3 percent earlier today. February-delivery futures gained 0.2 percent to $1,702 an ounce on the Comex in New York, where floor trading is closed today for the Thanksgiving holiday.
The Munich-based Ifo institute’s business climate index, based on a survey of 7,000 executives, increased to 106.6 from 106.4 in October. Economists expected a decline to 105.2, according to the median of 40 forecasts in a Bloomberg News survey.
Interest from the physical buyers has “finally emerged,” while a stronger response is needed “to form a more solid foundation for a recovery,” UBS AG said in a report yesterday.
Bullion is in the 11th year of a bull market and prices reached a record $1,921.15 an ounce on Sept. 6 as investors sought to diversify away from equities and some currencies amid debt crises and concerns about slowing economic growth. Assets held in exchange-traded products backed by the metal climbed to a record 2,350.757 metric tons yesterday, data compiled by Bloomberg show. Holdings have expanded 4.6 percent since the end of September.
Gold gained to $1,699 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,681 at the afternoon fixing yesterday.
Cash silver gained 0.7 percent to $31.9375 an ounce after falling the most in almost a week yesterday. Spot platinum gained 0.1 percent to $1,549.50 an ounce and palladium rose 0.3 percent to $587.75 an ounce.
--With assistance from Glenys Sim in Singapore. Editors: John Deane, Sharon Lindores
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