Gold Fluctuates After SPDR Assets Shrink to Lowest in Four Years

By Phoebe Sedgman 

Gold swung between gains and losses as investors weighed a drop in assets in the SPDR Gold Trust to the lowest level in four years with rising physical demand in China.

Gold for immediate delivery advanced 0.2 percent to $1,455.60 an ounce at 12:10 p.m. in Singapore. Earlier, prices slumped 0.3 percent to $1,447.75 before gaining as much as 0.4 percent to $1,458.85. Gold for June delivery climbed 0.4 percent $1,455.10 on the Comex in New York.

Gold tumbled 13 percent this year as equities rallied and some investors lost faith in the metal as a store of value. The Standard & Poor’s (SPX) 500 Index closed at a record for a fourth straight day yesterday, while the Dow Jones Industrial Average closed above 15,000 for the first time. Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, fell 0.4 percent to 1,057.79 metric tons yesterday, the lowest level since March 2009, according to data compiled by Bloomberg.

“Every time we see the U.S. equity market surge, we see a commensurate fall in the gold price,” said David Lennox, an analyst at Fat Prophets. People are switching from gold to equities, he said by phone from Sydney today.

Gold imports by China from Hong Kong more than doubled to an all-time high in March as buyers in the biggest consumer after India boosted purchases. Mainland buyers purchased 223,519 kilograms (223.52 metric tons), including scrap, compared with 97,106 kilograms in February, Hong Kong government data showed yesterday.

Silver for immediate delivery was little changed at $23.9795 an ounce after slumping as much as 0.7 percent. Spot platinum climbed 0.6 percent to $1,491.35 an ounce, while palladium gained 0.2 percent to $684.35 an ounce.

To contact the reporter for this story: Phoebe Sedgman in Melbourne atpsedgman2@bloomberg.net

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