Jan. 31 (Bloomberg) -- Gold had its biggest January rally in 29 years on signs that Greece may be nearer to reaching a debt plan. Silver also had its best start to the year in almost three decades.
Greek Prime Minister Lucas Papademos said progress had been made in debt-swap talks with bondholders. Gold rallied 4.3 percent last week after the Federal Reserve extended its pledge to keep interest rates low through at least late 2014 to spur growth.
“A combination of progress in Greece and the Fed statement is pushing gold higher,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “There is momentum in the market.”
Gold futures for April delivery gained 0.3 percent to settle at $1,740.40 an ounce at 1:52 p.m. on the Comex in New York, after reaching $1,750.60, the highest price since Dec. 8. Prices climbed 11 percent this month, the biggest January gain since 1983.
“ There is still uncertainty”, which is pushing investors to hold gold, Bernard Sin, the head of currency and metal trading at bullion refiner MKS Finance SA in Geneva, said today by telephone. “The opportunity cost of holding gold is still low.”
The metal climbed 10 percent in 2011 and touched a record $1,923.70 in September as investors sought to diversify from equities and some currencies.
Silver futures for March delivery retreated 0.8 percent to $33.262 an ounce on the Comex, after touching $34.13, the highest since Nov. 16. The commodity’s 19 percent gain this month was the biggest among the 24 raw materials tracked by the Standard & Poor’s S&P GSCI index, and the best start to a year since 1983.
On the New York Mercantile Exchange, platinum futures for April delivery declined 1.7 percent to $1,588.10 an ounce. Still, the metal’s 13 percent gain in January was the biggest monthly advance since February 2008. Palladium futures for March delivery fell 0.3 percent to $686.35 an ounce, dropping for the third straight session.
--Editors: Thomas Galatola, Steve Stroth
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