Gold traded above the lowest price in more than two weeks in New York as investors weighed tension over Ukraine against signs of an improving U.S. economy.
Data today may show a U.S. manufacturing gauge expanded after a report yesterday showed the Conference Board’s index of leading indicators rose the most in four months. Gold ended a 12-year bull run in 2013 on expectations the Federal Reserve would reduce stimulus as the world’s largest economy recovers.
Bullion slipped 7.3 percent since reaching a six-month high on March 17, when the Ukraine crisis spurred demand for a haven. An agreement to ease tensions showed signs of crumbling as the U.S. and Russia traded blame, while Vice President Joe Biden was meeting government leaders in the Black Sea country.
“Gold could find a floor if tension between Russia and the U.S./European Union over Ukraine continues to be tight,” Abhishek Chinchalkar, an analyst at Mumbai-based AnandRathi Commodities Ltd., wrote in a report. “Data from the U.S. have started looking very good. This has re-stoked worries that the Federal Reserve would begin normalizing its monetary policy sooner rather than later.”
Gold for June delivery added 0.2 percent to $1,290.70 an ounce by 7:52 a.m. on the Comex in New York. It reached $1,281.80 yesterday, the lowest since April 2. Futures volume was 28 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed. Bullion for immediate delivery was little changed at $1,290.94 in London, according to Bloomberg generic pricing.
Holdings in gold-backed exchange-traded products fell to 1,735.2 metric tons yesterday, the lowest since October 2009, data compiled by Bloomberg show. Money managers cut their net- long position, or bet on higher gold prices, to 90,137 contracts in the week to April 15, the lowest since mid-February, U.S. Commodity Futures Trading Commission data show.
“Gold remains under pressure as long as economic data out of the U.S. is positive,” Sun Yonggang, a macroeconomic strategist at Everbright Futures Co., said from Shanghai. “We see some support from the little pickup in physical activity when prices fall below $1,300.”
In China, the largest consumer, volumes for the benchmark spot gold contract in Shanghai climbed to a four-week high, data from the Shanghai Gold Exchange showed.
Silver for May delivery rose 0.6 percent to $19.47 an ounce in New York. Palladium for June delivery climbed 1.1 percent to $786.70 an ounce. It advanced to $817 on April 14, the highest since August 2011. Platinum for July delivery gained 0.8 percent to $1,411.60 an ounce, after falling to $1,399.80 yesterday, the lowest since March 28.
The Association of Mineworkers and Construction Union, whose members have been on a pay strike in South Africa for 13 weeks, are meeting with Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Lonmin Plc today. Amplats and Impala proposed April 17 to raise the cash portion of employees’ pay. A resolution may be weeks away, according to SBG Securities Ltd. and Investec Asset Management.
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