Gold traded near the highest level in almost two weeks on prospects for additional stimulus from central banks in Europe and Japan and signs of increased physical demand in Asia.
Spot gold traded at $1,593.22 an ounce at 8:49 a.m. in Singapore from $1,592.80 yesterday, when it climbed to $1,598.80, the highest intraday price since Feb. 28. Gold for April delivery was little changed at $1,592 an ounce on the Comex after four days of gains, the best run since August.
The European Central Bank will maintain its accommodative stance “as long as necessary,” according to Jens Weidmann, an ECB council member and head of Germany’s Bundesbank. Japanese political parties will unveil their stance on Bank of Japan nominees today as Prime Minister Shinzo Abe pushes for more stimulus. A report that showed industrial output fell in January boosted speculation that the Bank of England may add to stimulus.
“Easier global monetary policies have positive ramifications for bullion,” Howard Wen, an analyst at HSBC Securities (USA) Inc., wrote in a note. “The key support for bullion prices has been the emergence of Chinese physical buyers. Indian merchants noted that demand may pick up in April on the resumption of the wedding and festival season.”
Daily volumes for the benchmark cash contract on the Shanghai Gold Exchange have been more than double the average in 2012 since Feb. 18, when it reached a record 22,024 kilograms, according to bourse data.
Spot gold is down 4.9 percent this year amid speculation that the U.S. Federal Reserve may rein in its stimulus as the recovery in the largest economy gains traction. Data today may show U.S. retail sales advanced in February for a fourth month. Assets in gold-backed exchange-traded products dropped to 2,472.891 metric tons yesterday, the lowest since September.
Cash silver added 0.1 percent to $29.19 an ounce and spot platinum fell 0.1 percent to $1,594 an ounce. Palladium dropped 0.2 percent to $770.85 an ounce, dropping for a third day.