Gold climbed for a second day as physical demand picked up and investors weighed the continuation of stimulus measures by central banks against improving economic data. Silver, platinum and palladium advanced.
Spot gold gained 0.3 percent to $1,579.65 an ounce at 9:16 a.m. in Singapore, after earlier falling by 0.2 percent. Gold for April delivery advanced 0.3 percent to $1,578.90 an ounce on the Comex in New York. Bullion also increased as the Bank of Korea joined Russia and Kazakhstan in adding gold to reserves.
European Central Bank policy makers meet tomorrow after President Mario Draghi signaled last month the bank has no intention of tightening monetary policy anytime soon. China yesterday pledged to support economic expansion while maintaining its growth target at 7.5 percent for this year. Data yesterday showed service industries in the U.S. expanded in February at the fastest pace in a year as Federal Reserve policy makers remain divided on the pace of stimulus.
“Sentiment towards gold is being driven by how the markets view monetary policy and economic stimulus,” said Feng Liang, an analyst at GF Futures Co., a unit of China’s third-biggest listed brokerage. “Physical buying has been good at current prices. Central-bank buying remains a supportive backdrop.”
Cash bullion of 99.99 percent purity on the Shanghai Gold Exchange added 0.1 percent to 320.85 yuan a gram ($1,603.30 an ounce). Daily volumes for the benchmark cash contract have been more than double the average in 2012 since Feb. 18, when it reached a record 22,024 kilograms, according to exchange data.
Bullion rallied in the past 12 years as central banks joined investors in adding to holdings after nations from the U.S. to China pledged more stimulus to bolster economic growth. South Korea boosted gold reserves by 24 percent to 104.4 metric tons in February, the central bank said today.
Cash silver gained 0.3 percent to $28.79 an ounce, spot platinum climbed 0.6 percent to $1,598.75 an ounce, and palladium added 0.4 percent to $738.70 an ounce.
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