Gold up as central banks, investors add to holdings

LONDON: Gold rose on Thursday as central banks joined investors in adding to holdings and the euro strengthened against the dollar before a regional leaders' meet. Silver traded near a five-week high.


Gold rallied 11 per cent this year as investors and central banks bought bullion to diversify assets.

Holdings in ETPs backed by bullion rose to a record 2,605.318 tonne on Wednesday, data compiled by Bloomberg show. Kazakhstan, Turkey and Russia boosted reserves in October, according to data on the International Monetary Fund's website, joining Brazil, which raised holdings to the highest in more than 11 years.
"We think this is a positive signal for the market and expect moderate price gains in the days ahead," Tobias Merath, head of commodities and alternative investments research at Credit Suisse AG's private banking unit, wrote in a report, referring to the central bank purchases.

"The focus will be on events in Europe." US markets are closed for Thanksgiving.

Spot gold rose as much as 0.2 per cent to $1,732.65 an ounce before trading at $1,730.34 by 11:50 am in London. Gold for delivery in December rose 0.1 per cent to $1,730.30 an ounce in electronic trading on the Comex in New York.

Gold at the morning "fixing," used by some mining companies to sell output, increased to $1,729.75 an ounce in London from $1,724 on Wednesday afternoon.

Gold also gained as the euro rose to the highest in almost three weeks against the US dollar before leaders of the 27 European Union member nations gather for budget talks. Finance ministers from the 17-nation currency bloc will resume talks on aid for Greece next week.
The US Mint sold 67,000 ounces of gold coins so far in November, more than the 59,000 ounces for all of October, according to figures on the mint's website. At that pace, total sales for the month would be 100,500 ounces, up 145 per cent from a year earlier.

Silver was little changed at $33.3413 an ounce, after gaining as much as 0.3 per cent to $33.4525 in earlier trade. Platinum for immediate delivery gained 0.3 per cent to $1,581.50 an ounce and palladium advanced 1 per cent to $653.20 an ounce.

In India, gold prices recovered on brisk low-level retail buying amid wedding season offtake and higher global cues. Pure gold (99.9 purity) went up by Rs 105 per 10 grams to close at Rs 32,050 from Wednesday's closing of Rs 31,945. The most active gold contract for December delivery on the Multi Commodity Exchange ( MCX) was up by 0.12 per cent at Rs 31,850 per 10 gram.

Indian gold prices are generally determined by international prices. During festival seasons, local demand and currency movement also influence the prices to some extent.

Silver surged on sustained speculative demand on the back of renewed industrial buying.