BLBG: Gold Climbs for Third Day as Recovery Concern Weakens Dollar, Spurs Demand
Gold gained for a third day as concern over the pace of the U.S. recovery cut the value of the dollar, boosting the metal’s appeal as an alternative investment. Platinum jumped to the highest price since 2008.
Bullion for immediate-delivery advanced 0.5 percent to $1,374.93 an ounce at 2:51 p.m. in Seoul, while February- delivery gold gained 0.5 percent to $1,374.50 in New York. Immediate-delivery platinum climbed as much as 1.1 percent to $1,847.20 an ounce, the highest level since July 2008.
“There’s growth, but it doesn’t really seem to be exceptional at the moment,” Ben Westmore, an analyst at National Australia Bank Ltd. in Melbourne, said today by phone, referring to the U.S. economy. “It’s basically a currency effect.”
The dollar fell toward a five-week low against the euro on speculation that slow recoveries in housing and labor markets will deter the Federal Reserve from raising interest rates. The Dollar Index, which measures the currency’s strength against six major counterparts, fell for a second day.
U.S. housing starts fell 0.9 percent to a 550,000 annual rate last month, according to a Bloomberg survey before a Commerce Department report today. The number of people continuing to receive jobless benefits increased to 3.99 million in the week ended Jan. 8, from 3.88 million the previous week, another survey showed before tomorrow’s data.
Spot gold jumped 30 percent last year, reaching a record $1,431.25 in December. Prices have declined 3.2 percent this month, stoking demand from individual investors for bars and U.S. Mint coins.
‘Center of Attention’
Australia’s Perth Mint reported stronger demand as prices fell below $1,400 an ounce, Barclays Capital analyst Suki Cooper said in an e-mail yesterday. Bar premiums reached two-year highs before the Chinese New Year, Cooper said, citing the mint, which produces about 6 percent of the world’s bullion.
Platinum and palladium, used in pollution-control devices in cars, rose on improving “fundamentals,” said Bruce Ikemizu, head of commodity trading at Standard Bank Plc in Tokyo.
China and also India have good sales,” Ikemizu said by phone today, referring to the auto market. “Platinum was pretty quiet last year and it didn’t react to gold’s rally. People are basically looking at those fundamentals. Platinum group metals were kind of left behind, but now are the center of attention.”
Platinum for immediate-delivery gained 1.1 percent to $1,845.75 an ounce at 2:54 p.m. in Seoul. The price gained 21 percent last year, underperforming gold, silver and palladium, and is up 4.3 percent this month. Cash palladium increased 0.7 percent to $818.95 an ounce, rising 2.2 percent in January.
China Vehicles
China’s vehicle sales will grow 10 percent to 15 percent this year after jumping 32 percent to 18.06 million vehicles in 2010, the China Association of Automobile Manufacturers forecast. The country is the world’s biggest auto market.
The platinum group metals continued to outperform on physical demand and South African supply concerns as the country experienced heavier than normal rain, Hussein Allidina, the head of commodities research at Morgan Stanley in New York wrote in a Jan. 17 report e-mailed on Jan. 18
South Africa’s government on Jan. 17 declared 28 municipalities disaster areas following flooding that has claimed at least 40 lives and displaced more than 6,000 people since mid-December.
Silver for immediate delivery jumped as much as 1.2 percent to $29.2075 an ounce, the highest level since Jan. 13, and was at $29.1325.
To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net.
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
