Gold gains momentum

February 13, 2015 09:34 AM

Gold rose for its first back-to-back advance in more than three weeks as falling U.S. retail sales cast doubt on the pace of growth in the world’s largest economy.

Sales at U.S. retailers fell by a greater-than-expected 0.8% in January, reflecting smaller receipts at gasoline stations and declines at clothing and sporting goods stores. The Bloomberg Dollar Spot Index was little changed after falling 1% yesterday.

Bullion for April delivery advanced as much as 0.8% to $1,230.90 an ounce and traded at $1,227 by 8:22 a.m. on the Comex in New York. It lost 0.6% this week, a third weekly drop. Bullion for immediate delivery rose 0.4% to $1,227.18 in London, Bloomberg generic pricing showed.

“The weaker dollar on the back of the poor data is giving gold a lift,” Ross Norman, chief executive officer of bullion dealer Sharps Pixley Ltd., said in a telephone interview from London. “We’re in a range between $1,198 and $1,245 an ounce with gold biding its time looking for a new influence.”

Should Greece and euro-area finance ministers come to an agreement on debt negotiations, investor appetite for risk will increase and hurt demand for precious metals, ABN Amro Group NV said a note. Talks between European officials resume in Brussels on Friday.

Gold traders and analysts are bearish on prices for the first time in three months on speculation the stronger dollar and China’s Lunar New Year holiday will curb demand, according to a Bloomberg survey. Seven of the respondents were negative on prices next week, while 5 were bullish and 6 were neutral.

Holdings in gold-backed exchange-traded products fell 2.6 metric tons to 1,673.9 tons as of Thursday, data compiled by Bloomberg show. It was the first time in a month that assets declined for three successive days.

Silver for March delivery gained 1.2% to $16.99 an ounce in New York. Platinum was 0.1% higher at $1,202.20 an ounce. Palladium added 0.6% to $778.25 an ounce.

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