Gold swung between gains and losses, after the longest run of monthly declines since 1997, as investors weighed improving global economic data amid speculation that central banks will press on with stimulus.
Gold for immediate delivery was at $1,579.41 an ounce at 3:46 p.m. in Singapore from $1,579.58 yesterday. Prices are set to decline 0.1 percent this week after dropping 5.1 percent in February for the fifth monthly drop as investment holdings plunged 4.2 percent. Bullion for April delivery was little changed at $1,578.90 on the Comex in New York.
Prices fell 5.7 percent this year after a 12-year rally in 2012 as investor cut holdings in exchange-traded products to the lowest since September. European Central Bank President Mario Draghi said this week that the bank is far from exiting stimulus, while U.S. Federal Reserve Chairman Ben S. Bernanke defended the bank’s asset purchases. Goldman Sachs Group Inc. said that the commodity’s price cycle had turned as the U.S. economy recovers.
“Sentiment is improving and as a result of the world’s economy improving there’s less need for gold as a hedge against disaster,” said Gavin Wendt, a director at Mine Life Pty. in Sydney. “The reasons for holding gold are typically inversely proportional to the health of the world economy. When times are good, people don’t want to invest in gold.”
Jobless claims in the U.S. dropped in the week that ended Feb. 23, the government said yesterday. German unemployment unexpectedly fell in February amid signs that Europe’s biggest economy is recovering, and Japan’s industrial production in January rose for the second straight month. Two Chinese manufacturing indexes showed today the world’s second-largest economy expanded at a slower-than-estimated pace.
Traders are divided on the outlook, with 15 analysts expecting prices to gain next week, while 14 were bearish and three were neutral, according to a Bloomberg survey.
Gold ETPs fell for an eighth day to 2,502.75 metric tons yesterday, the lowest since September, according to data compiled by Bloomberg. Holdings in the SPDR Gold Trust, the biggest exchange-traded product backed by the metal, fell to the lowest since August. The U.S. Mint said gold coin sales were 80,500 ounces in February from 150,000 ounces a month earlier.
Cash bullion of 99.99 percent purity on the Shanghai Gold Exchange lost 1 percent to 320.70 yuan a gram ($1,602.89 an ounce). Most-active futures were little changed at 29,550 rupees per 10 grams ($1,686.40 an ounce) on the Multi Commodity Exchange of India Ltd.
Silver for immediate delivery was little changed at $28.53 an ounce, poised for a fourth weekly loss. Platinum dropped as much as 0.6 percent to $1,574.37 an ounce, the lowest since Jan. 8. The metal is set for a third weekly fall. Palladium declined 0.4 percent to $725.85 an ounce.
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