Gold, silver rebound after worst annual retreats since 1981

LONDON: Gold today rose to a two-week high, rebounding from the worst year in three decades, as a drop to a six-month low was seen spurring physical purchases and prompting some investors to reverse bearish bets.

Gold rose 1.5 per cent to USD 1,219.51. Prices reached USD 1,229.95, the highest since December 18. Silver also climbed 2.8 per cent to USD 19.95 an ounce, after toching 18.82 on December 31, the lowest since July, and slid 36 per cent last year for the biggest loss since 1981.

Bullion slid 28 per cent last year, the most since 1981, and reached 1,182.27 dollar an ounce on December 31, the lowest since a 34- month low set in June.

The premium to take immediate delivery in China was at USD 23 an ounce today, compared with an average of USD 16.21 in December and 18.72 dollar for all of last year, data compiled by Bloomberg show.

Gold ended a 12-year bull run and assets in bullion-backed exchange-traded products shrank for the first time since the first fund was introduced in 2003 as investors lost faith in the metal as a store of value.

US data on December 31 showed consumer sentiment and home prices climbed, underscoring the confidence expressed by the Federal Reserve when it said it will slow bond purchases this month amid an improving economy.