Precious metals close higher
GOLD has edged higher while platinum notched an eight-week high as stronger Chinese economic data bolstered investor interest in both metals. Spot gold was $1328 on Monday morning, while silver added 23 cents to $20.79.
LAST WEEK: Gold for December delivery, the most active contract, on Friday rose $US2.30, or 0.2 per cent, to settle at $US1,312.20 a troy ounce on the Comex division of the New York Mercantile Exchange. Gold prices are also up 0.2 per cent on the week.
Both precious metals rallied on the back of continued brighter economic data from China, which on Friday reported an uptick in industrial production.
"The China news is supportive for gold in that better economic conditions mean the Chinese populace gets to buy more gold," said Frank Lesh, a broker and futures analyst with brokerage FuturePath Trading LLC.
China is the world's largest producer of gold, and has vied with India for the top consumer spot.
Still, while physical demand from China has helped gold prices stabilise at around $US1,300 an ounce "it's not exactly propelling it higher," Lesh added.
Moreover, investors remain concerned about future US monetary policy and its effect on gold prices. The Federal Reserve has signalled it's likely to begin tapering off its $US85 billion-per-month in bond-purchases later this year.
Many traders worry that if bond yields rise as a result of curtailed stimulus efforts, few investors will be interested in a zero-yielding asset like gold.
"There's nobody in the investing community that thinks you're going to make a lot of money buying gold here," Lesh said.
Platinum, meanwhile, rallied as the industrial production data fanned hopes of stronger demand for the metal widely used in auto catalysts.
About 42 per cent of annual platinum supply went to making catalytic converters for the automobile industry in 2012, according to specialty chemicals company Johnson Matthey.
Platinum for October delivery rose $US9, or 0.6 per cent, to settle at $US1,500.60 a troy ounce on the Nymex. This was the first time platinum settled above $US1,500 an ounce since June 10.
