Gold climbed the most since September on central-bank buying and signs of more investor demand following last week’s biggest drop in three decades.
Russia and Kazakhstan expanded gold reserves for a sixth month in March, International Monetary Fund data show. The volume for the Shanghai Gold Exchange’s benchmark contract has been more than four times last year’s daily average every day since April 16, while coin sales by the U.S. Mint are heading for the highest since December 2009.
“News about central banks buying is very bullish,” Michael Smith, the president of T&K Futures & Options Inc. in Port St. Lucie, Florida, said in a telephone interview. “Prices are roaring higher with reports of increased physical buying worldwide.”
Gold futures for June delivery jumped 2.2 percent to $1,454.50 an ounce at 10:38 a.m. on the Comex in New York, heading for the biggest gain since Sept. 13. On April 15, the metal slumped 9.3 percent, the most since March 1980.
Futures have rebounded 10 percent since dropping to a two- year low of $1,321.50 on April 16.
Assets held in the SPDR Gold Trust, the largest exchange- traded fund backed by bullion, dropped to a 3 1/2-year low of 1,092.98 metric tons yesterday and have tumbled 11 percent this month.
“Some of the central banks might take this drop as an opportunity to buy as some physical players did,” said Dominic Schnider, head of commodities research at UBS AG’s wealth- management unit in Singapore. “The ETF selling, which is likely to continue in the short term, just caps the price.”
The U.S. Mint’s gold coin sales totaled 196,500 ounces this month, up from 62,000 in March, data on its website show. The total for December 2009 was 231,500 ounces. It said April 23 that it ran out of its smallest American Eagle gold coin.
Silver futures surged 4.5 percent to $23.91 an ounce on the Comex, heading for the biggest increase since June.