Immediate-delivery gold climbed as much as 0.9 percent to $1,560 an ounce and was at $1,558.30 at 9:57 a.m. in Singapore, up 9.7 percent in 2011. Holdings in exchange-traded (.GLDTONS) products, which reached a record 2,360.81 metric tons on Dec. 14, increased for a second day yesterday to 2,326.998 tons, according to data compiled by Bloomberg.
Despite gold’s recent correction, the uptrend remains firmly in place,” said Gavin Wendt, founder and senior resource analyst at Mine Life Pty. “The important thing about the recent price correction is that gold has been sold because it is a profitable asset. It’s been used to fund losses on declining assets elsewhere in investors’ portfolios, like equities.”
February-delivery bullion rose as much as 1.3 percent to $1,561 an ounce, snapping a six-day losing streak which was the longest since March 2009. It last traded at $1,560 on the Comex in New York. Futures are 9.8 percent higher this year.
Spot gold is on track of the longest bull run since at least 1920 as investors seek to hedge against weakening currencies, declining equities and rising inflation. Bullion reached a record $1,921.15 on Sept. 6, and would need to close below $1,536.92 to enter a bear market, typically defined as a drop of more than 20 percent from a recent high.
In October 2008, gold tumbled 17 percent as the worst recession since the Great Depression sent global equity and commodity markets tumbling. The metal jumped 22 percent in the next two months. Still, bullion is 4 percent lower this quarter for its first quarterly drop since the three months to September 2008, after the fall of Lehman Brothers Holdings Inc.
Dollar Strength
Cash gold dropped to $1,522.65 yesterday, the lowest level since July 6, as the dollar rallied on concerns that Europe’s debt crisis may escalate and hurt global growth. The U.S. currency has advanced 0.7 percent against the euro this week as bullion lost 3 percent.
“Renewed investor appetite for USD may explain recent gold price declines,” James Steel, an analyst at HSBC Securities USA Inc., wrote in a note. “Despite the decline in gold prices, gold holdings in exchange-traded funds remain at healthy levels.” Gold assets in ETPs backed by the metal expanded 6.5 percent this year, data compiled by Bloomberg show.
Spot silver gained 0.4 percent to $27.8150 an ounce, after dropping to $26.16 yesterday, the lowest level since Sept. 26. It is 10 percent lower in 2011, set for its first annual decline in three years.
Cash palladium climbed as much as 1.8 percent to $637.50 an ounce, before trading at $635, paring annual loss to 21 percent.
Platinum, the worst-performing precious metal in 2011, rose for the first time in three days, rebounding from a two-year low of $1,344.25 an ounce. It advanced as much as 1.5 percent to $1,390 an ounce and last traded at $1,388.25, taking the year’s loss to 22 percent for its first annual drop since 2008. Gold heads into new year with final quarter loss . For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today
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