Gold, little changed in Asia, may decline on speculation Chinese policy makers will deliver more interest-rate increases to cope with rising inflation.
Immediate-delivery bullion traded at $US1362.02 an ounce in Singapore after falling as much as 0.2 per cent. It closed at $US1361.85 yesterday. Gold for April delivery weakened as much as 0.3 per cent to $US1361.30 an ounce.
“It is unsurprising that expectations are that China’s inflation will continue its upward trend,” Marc Ground, a commodity analyst with Standard Bank, wrote in a note to clients.
Advertisement: Story continues below
“Should the numbers show even greater inflationary pressures, we would expect a knee-jerk sell-off in precious metals on speculation of further monetary tightening.”
China last week joined India, Indonesia, Thailand and South Korea in boosting interest rates as Asian policy makers sought to cool the economies leading a global rebound. Chinese consumer prices advanced 5.4 per cent in January from a year earlier, the most since July 2008, according to a Bloomberg survey before today’s report.
Asian stocks were little changed after yesterday’s biggest jump in more than two months and the Dollar Index, a six-currency gauge of the dollar’s value, was unchanged.
Assets in gold-backed exchange traded products stood at 2020.19 metric tons, snapping six-day decline, according to data compiled by Bloomberg from 10 providers. Holdings have shrunk 4.5 per cent from the record 2114.6 tons on Dec. 20.
Platinum for immediate delivery rose 0.4 per cent to $US1836.25 an ounce and spot palladium shed 0.2 per cent to $US833.25 an ounce. Silver was down 0.2 per cent at $US30.5675 an ounce.
