Gold Gains on Outlook for Lower Rates; Platinum Rises to Record
The U.S. currency erased gains for the year yesterday after Federal Reserve Chairman Ben S. Bernanke signaled the bank may reduce interest rates further. Assets in the StreetTracks Gold Trust, the biggest fund backed by gold, have dropped 3.4 percent from a record on Jan. 14, partly on speculation the dollar would rebound this year from earlier declines. "Gold likes lower interest rates," said Jack Allen, head gold trader at Natixis Commodity Markets in London. Gold for immediate delivery rose $2.16, or 0.2 percent, to $910.37 an ounce as of 12:12 p.m. in London. The record was $936.92 on Feb. 1. Prices have dropped 1.4 percent this week. New York gold futures gained $2.50 to $913.30 an ounce. Platinum climbed to a record in London after Anglo Platinum Ltd. said it shut its Polokwane smelter in South Africa and repairs may take four to six weeks. The company's production forecast at 2.4 million ounces this year won't be hurt as other smelters can take up the slack, according to a company statement. The metal, which is used in jewelry and auto catalysts, rose $36.75 to $2,047.75 in London after earlier gaining to a record $2,068.50. In Tokyo, the metal for December delivery rose 240 yen, or 3.7 percent, to close at a record 6,705 yen a gram ($1,926 an ounce) on the Tokyo Commodity Exchange. "Consumers remain very worried about medium term availability," JPMorgan Securities Ltd. analyst Michael Jansen in London wrote in an e-mail today. Combined with increased investment demand that now exceeds 300,000 ounces in exchange traded funds, platinum may "trade much higher," he wrote. Platinum Supplies Assets in gold exchange traded funds stood at 77.5 metric tons (2.5 million ounces) in the fourth quarter, according to the World Gold Council. The first platinum ETF started in May last year. The first gold ETF started in Australia in September 2002, according to Nigel Phelan of ETF Securities Ltd. in London. World platinum supplies may fall 400,000 ounces short of demand this year on South African mining disruptions, Standard Bank Group Ltd. said on Feb. 12. The wider deficit from 265,000 ounces last year will help to support prices at an average $1,900 this year, Standard Bank analysts including Johannesburg-based Walter de Wet wrote. That's up from $1,690 to date. "The focus is obviously still on South Africa," Allen of Natixis said, adding the gain may buoy gold as "it's all related." Gold may climb to $1,000 by the end of March, said Robin Wilkin, London-based head of commodities and currency technical analysis at JPMorgan Chase & Co. "It's hard to get overly bearish in gold because of the dollar." Platinum at $2,050 met "channel resistance," Wilkin said. "More important support runs from $1,980 to $1,935 and any pullback to there should be used as a buying opportunity." Silver climbed 14 cents to $17.385 an ounce and palladium rose 25 cents to $439.50. To graph technical gauges for gold: Moving Averages Relative Strength Index Fibonacci Back Test Technical Gauges To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net |
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Feb. 15 (Bloomberg) -- Gold advanced in London on prospects interest-rate cuts in the U.S. will spur demand for the metal as an alternative to the dollar. Platinum rose to a record.