Bloomberg News

Gold Extends First Weekly Gain Since November on Stimulus Signal

January 13, 2013

Gold advanced after Federal Reserve Bank of Chicago President Charles Evans said the U.S. central bank should keep policy accommodative to support the economy while lawmakers reduce government spending.

Gold for immediate delivery climbed as much as 0.3 percent to $1,667.93 an ounce and traded at $1,664.03 at 11:20 a.m. in Singapore. Prices advanced 0.4 percent last week, the first weekly gain since Nov. 23. Bullion for February delivery rose 0.2 percent to $1,664.20 on the Comex in New York.

The dollar weakened as much as 0.5 percent to $1.3404 versus the euro, the lowest level in more than 10 months, after the comments from Evans. Bullion climbed for a 12th straight year in 2012 as central banks from Europe to the U.S. and China boosted stimulus to counter slowing growth. Japanese Prime Minister Shinzo Abe will select a central bank chief who will expand monetary easing, he said yesterday.

“We can’t see any joy for the U.S. dollar,” said David Lennox, an analyst at Fat Prophets in Sydney. “That should be supportive of gold.”

Gold slid to a four-month low on Jan. 4 after Federal Reserve minutes indicated policy makers may end $85 billion in monthly bond purchases sometime this year. Bullion rose 70 percent as the Fed bought $2.3 trillion of debt in two rounds of easing from December 2008 through June 2011. Gold will climb as much as 14 percent this year and average $1,753, a London Bullion Market Association poll of traders and analysts showed.

Holdings in exchange-traded products backed by gold stood at 2,619.91 metric tons on Jan. 11, data tracked by Bloomberg show. Holdings fell for a second week last week, the data show.

Silver for immediate delivery climbed as much as 0.8 percent to $30.6925 an ounce and traded at $30.6475. Spot platinum rose 0.2 percent to $1,635.25 an ounce, while palladium gained 0.4 percent to $703.75 an ounce.

To contact the reporter for this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net

To contact the editor responsible for this story: Ovais Subhani in Singapore at osubhani@bloomberg.net


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