Gold Gains in New York as Silver Extends Best Run Since August
Nicholas Larkin and Debarati Roy

Gold rose toward the highest in more than a week in New York as investors weighed the outlook for U.S. stimulus amid concern economic growth may slow. Silver gained in the longest advance since August.

Gold advanced and silver reached the highest in more than two weeks yesterday after ADP Research Institute data showed weaker-than-forecast jobs growth in the U.S., fueling speculation government data tomorrow will trail estimates. The dollar was little changed versus a basket of 10 major currencies after falling to a one-week low yesterday.

The metals rebounded this year, after slumping the most since 1981 in 2013 as some investors lost faith in them as a store of value and as the Federal Reserve prepared to slow stimulus. Almost $3 trillion has been erased from the value of equities worldwide this year amid a slump in emerging-market currencies. China's markets are closed for the week-long Lunar New Year holiday until tomorrow.

"With stock markets doing bad, there should be no logic in shorting gold," Bernard Sin, head of currency and metal trading at bullion refiner MKS (Switzerland) SA in Geneva, said today by phone. "Precious metals were supported by the dollar and U.S. figures. With China out there hasn't been much movement in physical demand, so we expect some movement next week."

Bullion for April delivery added 0.3 percent to $1,260.50 an ounce by 8:15 a.m. on the Comex in New York. It reached $1,274.50 yesterday, the highest since Jan. 27. Futures trading volume was 49 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed. Gold for immediate delivery gained 0.2 percent to $1,260.82.

Silver for delivery in March climbed 1.1 percent to $20.03 an ounce. It reached $20.335 yesterday, the highest since Jan. 17. A fourth daily gain would be the longest run since August.

An ounce of gold bought as little as 62.65 ounces of silver in London today, the least since Jan. 23. Sales of gold coins by the U.S. Mint rose 63 percent in January to the highest since April, while silver purchases almost quadrupled.

"The correction in equities and disappointing economic data are pushing people to safe-haven assets," said Tommy Capalbo, a broker at Newedge Group in New York. The "ADP data did not meet market expectations, and people have started wondering whether the Fed will continue to taper."

The U.S. central bank said last week it will trim monthly bond buying by $10 billion after deciding in December to reduce purchases by the same amount amid a brightening growth outlook. A report from the Labor Department tomorrow is forecast to show U.S. payrolls grew 183,000 in January.

Palladium for delivery in March rose 1 percent to $713.95 an ounce after yesterday climbing for the first session in 10, ending the longest losing run since March 2011. Platinum for April delivery fell 0.1 percent to $1,377.80 an ounce.

Talks between the world's three largest platinum producers and the South African union that began a strike two weeks ago have been suspended after the sides were unable to reach a settlement. Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Lonmin Plc have lost about $180 million in revenue since the strike started Jan. 23, they said yesterday.

To contact the reporters on this story: Nicholas Larkin in London at [email protected]; Debarati Roy in New York at [email protected]

To contact the editors responsible for this story: James Poole at [email protected]; Millie Munshi at [email protected]

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