Gold Near One-Week High as Stimulus Outlook Tempers SPDR Drop

By Glenys Sim

Gold traded near a one-week high as optimism that stimulus around the world will be sustained overshadowed a decline in holdings in the biggest exchange- traded fund backed by bullion.

Bullion for immediate delivery was at $1,587.48 an ounce at 11:50 a.m. in Singapore from $1,585.35 yesterday, when it rose as high as $1,590.46, the most expensive since April 2. Prices earlier climbed 0.2 percent to $1,588.64 an ounce. Assets in the SPDR Gold Trust dropped to 1,200.37 metric tons yesterday, the least since June 2011. Holdings have lost 11 percent in 2013 as prices fell 5.3 percent.

Federal Reserve Chairman Ben S. Bernanke said earlier this week that U.S. economic conditions aren’t what he’d like them to be, speaking before the central bank releases minutes of its last meeting today. Bullion has dropped this year on speculation that the Fed may pare its stimulus amid an economic recovery. The minutes may contain details on conditions needed to end or taper the $85 billion a month program, Capital Economics said in a client note.

“Gold is having a slight bounce although the rebound isn’t very convincing as ETF holdings keep falling,” said Feng Liang, an analyst at GF Futures Co., a unit of China’s third-biggest listed brokerage. “We may get an idea of where the Fed is going with its stimulus plan later today, which will determine if gold can continue to move higher.”

China unexpectedly posted a trade deficit in March, adding to challenges in sustaining a rebound. Last week, the Bank of Japan doubled asset purchases, while the European Central Bank said that policy will remain accommodative. Gold rallied for a 12th year in 2012 as policy makers took steps to boost their economies, driving demand for the metal as a store of value.

Gold for June delivery was little changed at $1,586.20 an ounce on the Comex in New York. Cash silver dropped 0.2 percent to $27.94 an ounce, paring yesterday’s 2.5 percent rally that was the biggest since November.

Spot platinum was little changed at $1,547.50 an ounce, while palladium rose 0.2 percent to $727.40 an ounce.

To contact the reporter for this story: Glenys Sim at gsim4@bloomberg.net

source

please give me comments thanks