Gold Trades Near Two-Week High Above $1,600 Before Fed Meeting
By Glenys Sim - Mar 19, 2013
Gold held above $1,600 an ounce, trading near the highest level this month, before the U.S. Federal Reserve begins a two-day policy meeting. Silver advanced for a second day.
Gold for immediate delivery traded at $1,606.87 an ounce at 12:37 p.m. in Singapore from $1,605.63 yesterday. The metal jumped to $1,611.33 yesterday, the most expensive since Feb. 27, as a levy on bank deposits in Cyprus boosted haven buying.
Gold has lost 4.1 percent this year as Federal Reserve policy makers remain divided on the pace of stimulus that helped the metal to rally. Bullion last week had the first back-to-back weekly gain since January as data showed U.S. consumer prices rose more than projected in February and inflation reached a 10- month high in China.
“The optimism and positive perception of the U.S. economy has likely decreased the appeal of gold as a safe haven asset and reduced expectations of the extent and length of quantitative easing,” Lachlan Shaw, senior analyst at Commonwealth Bank of Australia, wrote in an e-mail. “As the market perceives increased uncertainty on U.S. Fed policy, volatility in gold prices may rise.”
Gold for April delivery traded at $1,605.40 an ounce from $1,604.60 on the Comex in New York yesterday. The most-active contract surged to $1,610.40 yesterday, the highest price since Feb. 27. Cypriot lawmakers are due to vote today, following a two-day delay, on how to spread the burden of a levy on bank depositors to help fund the nation’s bailout.
Spot platinum added 0.1 percent to $1,581.25 an ounce after five days of losses, the worst streak this year. One ounce of platinum bought 0.9845 ounce of gold today, after trading at the biggest discount to bullion in two months, data compiled by Bloomberg show. Metal held by exchange-traded products expanded to an all-time high of 51.8324 metric tons yesterday, data compiled by Bloomberg show.
Cash silver rose 0.4 percent to $28.99 an ounce. Silver assets in exchange-traded products climbed to a record 19,738.209 tons yesterday, data compiled by Bloomberg show. Palladium gained 0.2 percent to $764.75 an ounce.
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
