Gold holds below $1,300
Tuesday, 27 May 2014
SINGAPORE, May 26 (Bloomberg): Gold held below $1,300 an ounce as investors weighed the outlook for U.S. monetary stimulus against unrest in Ukraine. Assets in exchange-traded funds backed by platinum and palladium climbed to records.
Bullion for immediate delivery traded at $1,293.50 an ounce at 6 p.m. in Singapore from $1,292.61 on May 23, according to Bloomberg generic pricing. The metal decreased 0.1 per cent on May 23 after data showed sales of new homes in the U.S. increased the most since October. The U.S. and U.K. markets are shut for holidays today.
Gold sank 28 per cent last year on expectations that the Federal Reserve will further reduce bond purchases as the economy improves. Prices rebounded 7.7 per cent this year partly on tension between Ukraine and Russia. Kazakhstan, Turkey and Belarus expanded gold reserves in April as Mexico cut holdings, according to data on the International Monetary Fund website.
"There isn't much incentive for people to buy gold at the moment," said Zhu Siquan, an analyst at GF Futures Co., a unit of the Guangzhou, China-based company that bought Natixis Commodity Markets Ltd. "Trading is expected to be lackluster with the U.S. holiday, with no economic data to look forward to. Ukraine continues to offer background support."
Holdings in the SPDR Gold Trust, the largest exchange-traded product backed by bullion, were unchanged on May 23 after sliding to 776.89 metric tons on May 21, the lowest level since December 2008. In China, volumes for the benchmark spot contract in Shanghai fell to 9,907 kilograms on May 23, the least since April 30.
Gold for August delivery traded at $1,293.60 an ounce on the Comex in New York from $1,291.90 on May 23. Investors cut their net-long positions on gold for a second straight week to 90,358 contracts in the week ended May 20, U.S. Commodity Futures Trading Commission data show.
Silver for immediate delivery traded at $19.4465 an ounce from $19.4584 on May 23, when prices slipped 0.3 per cent.
Platinum rose 0.5 per cent to $1,480.75 an ounce after climbing to $1,496.38 on May 22, the highest level since September. Palladium increased 0.2 per cent to $832 an ounce after reaching $839 on May 22, the highest since August 2011. On May 23, assets in platinum-backed ETPs expanded to 85.62 tons and those in palladium-backed ETPs increased to 86.93 tons.