Gold headed for the best weekly gain since October on speculation that demand will increase in Asia, the largest consuming region.
Platinum rose to the highest price since November. Bullion for immediate delivery climbed as much as 1% to $1 237.03 an ounce, the highest level since December 18, and was at $1 230.46 at 11:51 am in Singapore, 1.4% higher this week. Gold dropped to $1 182.27 on December 31, the lowest level since June 28, capping the metal’s worst annual rout since 1981.
The volume for bullion of 99.99% purity on the Shanghai Gold Exchange climbed to 10 400 kilograms on Thursday from 7 849kg on December 31, the least since December 2. The premium to take immediate delivery in China, which probably overtook India as the largest user in 2013, was about $21.07 an ounce on Thursday compared with last year’s average of $18.72.
"There's going to be a lot of uncertainty, a lot of volatility in gold prices," Ed Moy, the chief strategist at Morgan Gold, an Irvine, California-based investor that offers bullion for retirement accounts, said in an interview on Bloomberg Televisions First Up.
"Gold is part of the Asian mindset that it’s a way to store your wealth. Given the extremely strong demand from Asia, that should put some upward pressure on gold in the long term."
Gold for February delivery climbed 0.5% to $1 230.80 an ounce on the Comex in New York amid trading volume that was 46% above the 100-day average for this time, data compiled by Bloomberg showed.
Short gold holdings, referring to bets on lower prices, jumped almost fourfold from October to December 24, US Commodity Futures Trading Commission data show.
Gold slumped 28% in 2013 as money-printing by central banks failed to spur inflation, damping demand for a protection of wealth. Assets in bullion-backed exchange-traded products shrank for the first year since the first product was introduced in 2003 as the Federal Reserve said that it will reduce bond purchases this month amid an improving economy.
"Everyone's going to be watching the Fed taper, and depending on how the Fed does it, it will have a dramatic impact on gold prices over the course of 2014," said Moy.
Platinum climbed as much as 1.5% to $1 424.88 an ounce, the highest price since November 19, and traded at $1 408.50. The rise extended Thursday's 2.7% advance, which was the most since October.
Silver for immediate delivery was little changed at $20.0389 an ounce after rising as much as 1.3% to $20.2828. Palladium advanced 0.2% to $731.32 an ounce, up 2.8% and set for the best week since October. – Bloomberg