Gold held near a three-month high as investors weighed a weaker dollar against speculation the metal’s advance will spur traders to sell.
The dollar was little changed near a seven-week low against a basket of 10 major currencies before Federal Reserve Chair Janet Yellen speaks today and after a gauge of U.S. manufacturing yesterday rose less than analysts projected. Holdings in gold-backed funds recorded the biggest two-day increase since 2012.
Gold has risen 10 percent this year, rebounding from the biggest annual slump in three decades, as the Fed said it will keep interest rates at almost zero for a considerable time and as unrest in Iraq and Ukraine spurred haven demand. As the metal advanced, a technical gauge indicated prices may retreat and demand from top buyer China remains muted.
“With continued dollar weakness and various ongoing problems around the world, the precious metals seem to be attracting some fresh attention,” David Govett, the head of precious metals at Marex Spectron Group in London, wrote today in a report. “We are seeing investors getting in near the highs. I would expect to see some profit taking over the next day or two.”
Gold for immediate delivery was little changed at $1,325.82 an ounce by 9:53 a.m. in London, according to Bloomberg generic pricing. It reached $1,332.33 yesterday, the highest since March 24. Gold for August delivery was little changed at $1,326.30 on the Comex in New York.
The U.K. Treasury Select Committee meets today at 2:45 p.m. local time on the manipulation of benchmarks. The World Gold Council last month called for a meeting on July 7 for the industry to discuss changes to the century-old London gold fixing.
Holdings in gold-backed exchange-traded products rose 13.2 metric tons in the past two days, the biggest two-day tonnage increase since 2012, data compiled by Bloomberg show. At 1,728.7 tons, assets are the highest since May 1.
Futures trading volume was 40 percent below the average for the past 100 days for this time of day, according to data compiled by Bloomberg. Gold’s 14-day relative-strength index was at 70.1, above the level of 70 that suggests to some traders who study technical charts that prices may retreat.
In China, the world’s largest consumer, volumes for the benchmark spot contract on the Shanghai Gold Exchange fell to 8,569 kilograms yesterday, the least since June 6. Volumes were little changed so far today, the latest data show.
“The weaker dollar has aided the ascent but gold is now looking increasingly overbought and the rally has put off price- sensitive physical buyers,” Xia Yingying, an analyst at Nanhua Futures Co., said from Hangzhou, China.
Silver for immediate delivery was little changed at $21.0426 an ounce in London. It reached $21.229 yesterday, the highest since March 18. Palladium fell 0.2 percent to $852.25 an ounce, after rising the previous seven days in the longest run of gains since March. Platinum lost 0.2 percent to $1,506.56 an ounce. It reached $1,512.69 yesterday, the highest since Sept. 4.
About 220,000 members of the National Union of Metalworkers of South Africa stopped work yesterday to support their request for pay increases. The protests come after a platinum strike that lasted from January to June. The country is the largest producer of the metal.
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