Gold held above a one-month low on speculation the biggest decline this year may spur demand as holdings in the largest exchange-traded product backed by the metal expanded to the highest level since April.
Bullion for immediate delivery rose as much as 0.2 percent to $1,310.11 an ounce, and traded at $1,309.36 at 2:29pm in Singapore, according to Bloomberg generic pricing. The metal sank to $1,303.10 Tuesday, the lowest since June 19, before ending 2.4 percent lower, the largest drop since December.
Holdings in the SPDR Gold Trust climbed this year, rebounding from a 41 percent contraction in 2013, even as the Federal Reserve pressed on with cuts to stimulus. The assets rose 8.68 metric tons to 808.73 tons yesterday, the biggest tonnage gain since October 2012, data from the company’s website showed. Fed chair Janet Yellen testifies to lawmakers today and may offer clues on the timing of rate increases.
“Yellen’s testimony is potentially a source of more insight” into Fed policy, said Sarah Xie, a Hong Kong-based analyst at Wing Fung Financial Group Ltd. While there may be some buying on dips, gold will probably remain under pressure as equities rally, concern eases over Portugal’s banking problems and geopolitical tensions don’t worsen, said Xie.
Gold’s retreat Tuesday came as European and US equities climbed amid speculation that Portugal would contain financial woes at one of its banking groups and as Citigroup Inc. reported better-than-expected trading revenue. The assets in the SPDR Gold Trust are at the highest level since April 7.
Gold for August delivery advanced 0.3 percent to $1,310 an ounce on the Comex in New York, rebounding from a 2.3 percent slump Tuesday that was the most since December.
Silver for immediate delivery traded at $20.9245 an ounce from $20.9187 Tuesday, when prices tumbled 2.5 percent, the most since February.
Spot platinum increased 0.3 percent to $1,497.85 an ounce after a 1.2 percent drop Tuesday that was the most in a month. Palladium added 0.2 percent to $872.50 an ounce.
BUSINESSDAY
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