“Gold advanced in New York, trimming the worst monthly loss since December 2011, as demand for physical metal countered outflows from bullion-backed exchange- traded products and the dollar weakened. Silver also gained.
Gold climbed 4.2 percent last week, the best showing since January 2012, as coin and jewelry demand expanded from the U.S. to China and India. The volume for the benchmark contract on the Shanghai Gold Exchange surged to a record last week, while premiums to secure supplies in India jumped to five times the level before the slump. Coin sales by the U.S. Mint are set for the highest since December 2009, while inventories monitored by the Comex tumbled last week to the lowest level since July 2008.
“The key question in the near term is whether retail and jewellery demand can continue to counter ETP outflows and the rise in gross shorts,” Barclays Plc analysts Suki Cooper, Lynnden Branigan and Christoper Louney wrote in a note today. “In our view, the vulnerability of further ETP outflows subsides should prices recover to above the $1,500/ounce level or equity markets underperform, given the stronger correlation between the two.”
Gold for June delivery rose as much as 1.7 percent to $1,478.30 an ounce on the Comex in New York and traded at $1,476 by 7:35 a.m. The metal is heading for a 7.5 percent drop in April after the metal plunged into a bear market this month. Bullion for immediate delivery rose 0.9 percent to $1,475.68 an ounce in London.
