Gold climbed for a second day after Federal Reserve Chairman nominee Janet Yellen backed stimulus until the economy and labor market improves, reducing concern the central bank’s bond-buying program will soon be scaled back. Silver rebounded from the lowest level since August.
Bullion for immediate delivery rose as much as 0.4 percent to $1,287.01 an ounce, and was at $1,284.66 at 8:49 a.m. in Singapore. Prices rose 1.1 percent yesterday, the most since Oct. 22, as the Bloomberg U.S. Dollar Index lost 0.4 percent. The measure of the greenback’s value against 10 currencies fell 0.2 percent today, trimming this year’s advance to 3.1 percent.
Gold lost 23 percent in 2013 as signs of recovery spurred speculation that the Fed will start to cut the $85 billion of monthly bond buying, strengthening the dollar. Yellen said in testimony prepared for her nomination hearing today before the Senate Banking Committee that the economy and labor market are performing “far short of their potential” and must improve before the central bank can begin reducing monetary stimulus.
“The focus for the bullion market may shift to the upcoming testimony by Yellen,” James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note. “Chinese gold demand remains brisk. However, gold is likely to remain on the defensive in the near term.”
Gold for delivery in December gained as much as 1.4 percent to $1,286.50 an ounce on the Comex, before trading at $1,284 and ending a five-day losing streak that was the longest since the six days through Aug. 6. Trading volume was 8 percent above the average for the past 100 days at this time.
In China, the second-largest consumer, volumes for cash gold of 99.99 percent purity on the Shanghai Gold Exchange climbed to 15,413 kilograms yesterday, the most since Oct. 11.
Spot silver rose as much as 0.8 percent to $20.78 an ounce, snapping five days of losses, and traded at $20.731. Prices touched to $20.4488 yesterday, the lowest level since Aug. 9.
Platinum advanced for a third day, rising 0.5 percent to $1,443.43 an ounce. Palladium rose 0.4 percent to $735.38 an ounce, ending five days of losses.
Bloomberg – November 13, 2013