Gold, which generally earns returns only through price gains, averaged a record $1,669 last year as nations pledged more stimulus to bolster growth. Banco de la Ciudad de Buenos Aires, Argentina’s only gold trader, is talking with mining companies to buy the metal directly as surging demand from customers seeking protection from faster inflation exhausts its supply of scrap, Carlos Leiza, director of the bank’s secured loans unit, said in a March 11 interview.
Japan’s central bank governor Haruhiko Kuroda vowed yesterday to pursue bold monetary easing. Fed Chairman Ben S. Bernanke steered clear two days ago of any suggestion that a reduction in $85 billion in monthly bond buying is imminent. The central bank said it will leave its key interest rate near zero as long as unemployment remains above 6.5% and the outlook for inflation is less than 2.5%.
Gold slid the previous five months in the worst run since 1997 on speculation the U.S. would curb stimulus as signs of a recovery boosted equity markets. Gold is unlikely to return to its September 2011 record of $1,921.15, Credit Suisse Group AG said last month. Barclays Plc and Societe Generale SA are among banks predicting the bull market has, or is close to, peaking.
About $6.4 trillion was added to the value of global equities since November as China accelerated for the first time in two years. The International Monetary Fund predicts global expansion will climb to 3.5% in 2013 from 3.2% in 2012. U.S. unemployment fell to a four-year low of 7.7% last month, as job growth surged, Labor Department data show.
Investors sold 179.5 metric tons of gold valued at $9.3 billion from exchange-traded products since holdings reached a record in December, data compiled by Bloomberg show. Assets reached an almost seven-month low of 2,452.2 tons on March 20. The U.S. Mint sold 36,500 ounces of American Eagle gold coins this month, compared with 80,500 for all of February and 150,000 in January, its website show.