By Glenys Sim
Dec. 23 (Bloomberg) -- Gold climbed and was set for the first weekly gain in three after better-than-expected U.S. economic data damped demand for the dollar as a haven investment.
Cash bullion snapped two days of losses to rise as much as 0.5 percent to $1,614.05 an ounce. It was at $1,611.55 at 3:17 p.m. in Singapore, up 0.8 percent this week. The February- delivery contract was little changed at $1,612.60 on the Comex.
“While the U.S. is beginning to show signs of economic recovery, it’s still too soon to talk about growth there,” said Ye Yanwu, head of research at Everbright Futures Co. “At the same time, Europe continues to be mired in debt, and this will likely keep demand for the dollar strong and weigh on gold.”
The number of applications for U.S. unemployment benefits fell last week to the lowest since 2008 and confidence among U.S. consumers rose in December, reports showed yesterday, sending the dollar lower. Mervyn King, vice chairman of the European Systemic Risk Board, said Europe’s crisis may hurt the real economy and the outlook for financial stability has worsened.
Gold has rallied 13 percent this year, touching a record $1,921.15 on Sept. 6, as investors sought to hedge against market turmoil. Prices fell 6.6 percent last week, and touched $1,560.97 on Dec. 15, the lowest price since Sept. 26, after the Federal Reserve refrained from taking new action to boost growth.
Fund Holdings
Holdings in exchange-traded funds, which reached a record 2,360.810 metric tons on Dec. 14, fell for a sixth day to a one- month low of 2,321.158 tons yesterday, data compiled by Bloomberg show. That’s the worst run since September.
Gold “is consolidating after the recent big slide,” Ye said from Shanghai. “Once the crisis in Europe shows fresh signs of deterioration, we’ll see investors come back.”
Spot silver gained for the first time in three days, climbing as much as 1 percent to $29.365 an ounce. The metal, which has retreated 5.1 percent in 2011, last traded at $29.33 an ounce and is 1.4 percent lower this week.
Cash platinum rose for the first time in three days, gaining 0.7 percent to $1,433 an ounce, down 19 percent for the year. Spot palladium advanced for a fourth day, rising 0.7 percent to $656.50 an ounce, trimming the year’s loss to 18 percent.
--Editors: Ovais Subhani, Thomas Kutty Abraham
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net
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