Gold Rises After a Week of Drudging on Speculation the Lows are In

“Gold gained for the first time in a week in London on speculation that prices near a six-month low will increase purchases.

Gold is down 3.7 percent this year and global equities are up 4.8 percent as speculation grew that economies are improving. About $1.2 trillion in automatic spending cuts stemming from a 2011 agreement are scheduled to take effect in the U.S. in March. Morgan Stanley said in a report yesterday it expects “bargain hunting” in gold this week.

“It’s very cheap,” said David Lennox, a resource analyst at Fat Prophets in Sydney, referring to gold. “The U.S. has still got to deal with budgetary and debt constraints, they’re not going to go away. While that’s still there, we think there’s opportunity for gold to rally robustly.”

Gold for immediate delivery added 0.2 percent to $1,612.90 an ounce by 11:26 a.m. in London. Prices reached $1,598.23 on Feb. 15, the lowest since Aug. 15. Futures for April delivery were 0.2 percent higher at $1,612.60 on the Comex in New York.

U.S. markets were shut yesterday for the Presidents’ Day holiday. Futures trading volume was almost triple the average in the past 100 days for this time of day. Bullion at the morning “fixing,” used by some mining companies to sell output, was at $1,613.50 in London, up from $1,610.75 yesterday afternoon.

Silver for immediate delivery rose 0.5 percent to $30.045 an ounce. It reached a six-week low of $29.6912 on Feb. 15. Palladium gained 0.6 percent to $766.83 an ounce. Platinum was up 0.1 percent at $1,694.97 an ounce….”