Gold advanced, trimming a second monthly decline, as lower prices lured buyers of the physical metal amid an extended drop in holdings in exchange-traded products. Silver headed for a fourth monthly loss, the worst run since June.
The U.S. Mint is on pace to sell 62,100 ounces of gold coins in May, 17 percent more than a year earlier, according to data released yesterday. The agency said yesterday it would resume taking orders for its one-tenth ounce gold coin after suspending sales in April while demand surged after prices tumbled. Gold has slumped 17 percent this year in London as investors slashed holdings in exchange traded funds amid speculation the U.S. Federal Reserve would taper asset purchases that helped bullion cap a 12-year bull run in 2012.
In contrast to demand among institutional investors, who withdrew funds from the gold ETFs again yesterday, gold demand among retail investors thus remains extremely robust, Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said in an e-mailed report today.
Spot gold climbed 0.2 percent to $1,383.85 an ounce by 11:34 a.m. in London, down 6.3 percent this month. Prices fell 1 percent yesterday as U.S. economic data backed the case for a cut in monetary stimulus by the Fed. Bullion for August delivery advanced 0.2 percent to $1,382.70 an ounce on the Comex in New York, heading for a 6.2 percent drop in May and a second monthly decline. Futures trading volumes were 63 percent higher than the average for the past 100 days for this time of day, according to data compiled by Bloomberg.
Holdings Shrink
Assets in ETPs dropped 0.2 percent to 2,154.2 metric tons yesterday, according to data compiled by Bloomberg. The holdings have shrunk 18 percent in this year, tumbling to the lowest since June 2011, as demand for haven assets declined amid an improving economic outlook. Data yesterday showed U.S. consumer confidence climbed to a more than five-year high while an index of property values made the biggest 12-month gain since April 2006. The Fed currently buys $85 billion of Treasury and mortgage debt a month.
There are some people still willing to pick up the metal when prices come off, said Xiang Nan, an analyst at CITIC Securities Futures Co., a unit of Chinas biggest listed brokerage. This stalemate between the bulls and bears is expected to continue for a while.
Silver for immediate delivery retreated 0.5 percent to $22.2375 an ounce, 27 percent lower this year. Platinum was little changed at $1,460.70 an ounce, heading for a fourth monthly loss.
Palladium declined 1 percent to $747.18 an ounce, trimming a monthly advance. The price touched $762.60 yesterday, the most expensive since April 3.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net; Whitney McFerron in London at wmcferron1@bloomberg.net.
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
source: BLOOMBERG.COM
