Gold futures posted the biggest gain in almost two weeks as demand for bars and jewelry increased in India and China, the world’s largest consumers of the metal.
Imports by China from Hong Kong more than doubled to an all-time high in March, Hong Kong government data showed yesterday. India’s purchases are set to top 100 metric tons in May for the second straight month, according to MMTC-PAMP India Pvt., a bullion refiner. Last month, gold had the biggest two- day drop in 33 years, slumping into a bear market. The metal has climbed 12% from a 26-month low on April 16.
“The jump in prices was mainly on reports of strong physical buying from India and China,” Michael Smith, the president of T&K Futures & Options Inc. in Port St. Lucie, Florida, said in a telephone interview. “Imports by China in April may have been even higher than in March.”
Gold futures for June delivery advanced 1.7% to settle at $1,473.70 an ounce at 1:46 p.m. on the Comex in New York, the biggest gain for a most-active contract since April 25. On April 16, the price touched $1,321.50, the lowest since Jan. 28, 2011.
Buyers in mainland China purchased 223,519 kilograms (223.52 tons) of gold in March, including scrap, compared with 97,106 kilograms in February, Hong Kong government data showed. Separate figures yesterday showed China’s gold usage rose 26% in the first quarter as prices fell.
Yesterday, holdings in the SPDR Gold Trust, the biggest exchange-traded product backed by the metal, declined 0.4% to 1,057.79 tons, the lowest since March 2009, according to data compiled by Bloomberg.
Gold has dropped 12% this year as equities rallied and some investors lost faith in the metal as a store of value. Yesterday, the Standard & Poor’s 500 Index closed at a record for the fourth straight session, while the Dow Jones Industrial Average settled above 15,000 for the first time.
“We strongly believe that gold prices will fall under heavy pressure again on a further liquidation of gold-investment demand,” Georgette Boele, a commodities strategist at ABN Amro Group NV, said in a report.
Silver futures for July delivery rose 0.5% to $23.927 an ounce on the Comex. The price has dropped 21% this year.
On the New York Mercantile Exchange, platinum futures for July delivery gained 1.6% to $1,504.90 an ounce.
Palladium futures for June delivery rose 2.6% to $698.25 an ounce, the biggest jump since March 20.