Gold Trades Near Four-Month High

Singapore (Mar 7)   Gold traded near the highest level in more than four months and headed for a fifth weekly advance before U.S. payrolls data while tension persisted in Ukraine.

Bullion for immediate delivery was at $1,351.05 an ounce at 1:14 p.m. in Singapore from $1,350.85 yesterday, when prices rose 1 percent on expectations that U.S. borrowing costs will hold at a record low and European inflation will gradually accelerate. The metal reached $1,354.87 on March 3, the highest since Oct. 30, as tension between Ukraine and Russia escalated.

Gold rose 1.8 percent this week as a private report showed that U.S. companies added fewer workers than projected in February and Russian forces occupied the Ukrainian region of Crimea, stoking concern that there may be military conflict between the two. Bullion rallied 12 percent this year even as the Federal Reserve reduced stimulus.

“People are waiting for the jobs data to gauge the economy in the U.S.,” Zhu Siquan, an analyst at GF Futures Co., a unit of the Guangzhou-based firm that bought Natixis Commodity Markets Ltd., wrote in a note. “As long as the situation in Ukraine remains, gold will get safe-haven bids.”

William Dudley, president of the Federal Reserve Bank of New York, said yesterday expectations that interest rates won’t rise until mid-2015 are appropriate, while European Central Bank President Mario Draghi expects the inflation rate to gain in the next 30 months.

Fed Tapering

Fed Chair Janet Yellen said last week the central bank is “open to reconsidering” the pace of cuts in asset purchases should the economy weaken. The Fed, which next meets March 18-19, announced a $10 billion reduction to bond buying at each of its past two meetings, leaving purchases at $65 billion.

Holdings in the SPDR Gold Trust, the biggest exchange- traded product backed by bullion, were unchanged yesterday for a seventh day, the longest stretch assets have held steady in 13 months. In China, volumes for the benchmark spot contract in Shanghai have been lower over the past seven days than the two- week high that was reached on Feb. 25.

Gold for April delivery lost 0.1 percent to $1,351.10 an ounce on the Comex in New York after climbing 0.9 percent yesterday. In Ukraine, Crimean lawmakers called a referendum to return the Black Sea peninsula to its former Soviet-era master as U.S. and the European Union seek measures to protest the Kremlin’s moves in the region.

Source: Bisnis.com