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Gold starts to advance after decline

28 December 2009 11:39 (UTC +04:00)

Baku -APA-Economics. Gold advanced on speculation that some investors are increasing their holdings after the metal fell for a fourth week, the longest losing streak since April, Bloomberg reported.
Bullion may gain this week as some investors buy the metal after its â€œexcessiveâ€ drop from a record $1,226.56 an ounce on Dec. 3, a survey showed. Eleven of 21 traders, investors and analysts surveyed by Bloomberg said gold would rise. Seven forecast lower prices and three were neutral.
Gold for immediate delivery strengthened as much as 0.8 percent to $1,113.81 an ounce before trading at $1,113 at 1:27 p.m. in Singapore. Gold for February delivery in New York added 0.8 percent to $1,113.70 an ounce.

Bullion, up 26 percent this year, is on course for a ninth annual advance as U.S. growth slumped during the longest recession since World War II, spurring demand for the precious metal as an investment haven. Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were unchanged for a third day at 1,132.71 metric tons as of Dec. 24, according to the companyâ€™s Web site.

Signs of improving U.S. growth sparked a rally in the dollar this month, after the currency fell to a 15-month low in November. Gold has slid 5.7 percent in December as the Dollar Index, the six-currency basket, rose 3.7 percent. The index fell as much as 0.2 percent today.
Platinum jumped to a three-week high as expanding auto sales helped boost demand for the metal used in pollution- control devices. Toyota Motor Corp., Japanâ€™s largest carmaker, led the first rise in domestic auto production in 14 months as government incentives spurred demand.
Output at the countryâ€™s 12 vehicle makers increased 0.5 percent from a year earlier to 859,677 units in November, the Japan Automobile Manufacturers Association said in a statement on Dec. 25. Tax cuts and subsidies in Japan helped boost sales by about 600,000 vehicles in 2009 and may increase demand by about 900,000 next year, the association said. Japanâ€™s vehicle sales may rise 4.1 percent next year, an auto industry group said on Dec. 24.
Platinum for immediate delivery soared as much as 1.9 percent to $1,491.50 an ounce, the highest price since Dec. 4, before trading at $1,484.50 an ounce. Silver gained 0.7 percent to $17.61 an ounce and palladium added 0.2 percent to $387.91 an ounce.