Gold rebounded from the lowest level in five weeks as conflicting U.S. data clouded the outlook for higher rates before Federal Reserve policy makers meet this week and investors boosted holdings of the metal. Silver surged.
Bullion for immediate delivery rose as much as 0.4 percent to $1,183.83 an ounce and traded at $1,181.36 at 2:37 p.m. in Singapore, according to Bloomberg generic pricing. Prices fell to $1,175.35 on April 24, the lowest level since March 20. Gold in Shanghai declined to the lowest in five weeks.
The metal is little changed this month after dropping in February and March as investors gauge data for clues on when rate rises may start. The Fed begins a two-day meeting on April 28 after conflicting reports on the housing market and orders for business equipment.
Investors expanded gold holdings for a second week while Greece will look for ways to assemble enough cash to pay its pensioners and employees this week.
“Data flow continued to undershoot market expectations,” Australia & New Zealand Banking Group Ltd. wrote in a note on Monday.
“Further disappointment in the U.S. data pulse heightened fears that the Federal Reserve could soften its rhetoric at this week’s FOMC meeting.”
While the Fed has ruled out raising rates when it meets in April, policy makers have left the door open for June. Higher rates hurt the allure of gold, which usually only provides a return if prices rise, spurring investors to favor assets with better yield prospects.
The Bloomberg Dollar Spot Index was little changed on Monday after the gauge fell for a third day on Friday for a second weekly loss.
Bookings for non-military capital goods excluding aircraft, unexpectedly dropped 0.5 percent in March, a seventh decline, the Commerce Department said Friday. Demand for all durable goods rose 4 percent on aircraft and autos.
Reports last week showed sales of previously owned homes jumped in March, while purchases of new ones fell more than forecast.
Gold Holdings
Greece will use the deposits of local governments, cities and other funds to meet end-of month payments totaling over 1.5 billion euros ($1.6 billion). Euro area finance ministers on Friday said they won’t disburse more aid until bailout terms are met.
Greece has fought to unlock aid since striking a deal to extend its bailout program in February. Gold for June delivery rose 0.6 percent to $1,181.80 an ounce on the Comex. Speculators boosted their net-long positions in U.S. gold futures and options in the week ended April 21, Commodity Futures Trading Commission data show.
Holdings in exchange-traded products backed by the metal increased for a sixth day on Friday, the longest run since Jan. 29, according to data compiled by Bloomberg.
Assets have expanded 5.1 metric tons in April, the data show. Bullion of 99.99 percent purity lost as much as 1.6 percent to 235.01 yuan a gram ($1,178.69 an ounce) on the Shanghai Gold Exchange, the lowest since March 23, and was at 236.70 yuan.
Silver for immediate delivery climbed as much as 1 percent to $15.8907 an ounce and was at $15.8612. Palladium fell 0.2 percent to $771.10 an ounce, while platinum was little changed at $1,122.88 an ounce.
bloomberg.com
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