Gold rebounded extending to its 11th annual gain. The five month low spurred demand from jewelers and investors. Over 2011 India's purchases rose 12% in the first quarter alone. Prices are up a total of 10% this year.
December 30, 2011, 9:48 AM EST
By Claudia Carpenter
Dec. 30 (Bloomberg) -- Gold rebounded in New York, extending an 11th annual gain, on speculation prices at a five- month low will spur demand from jewelers and investors.
Bullion fell 4.8 percent over the previous six sessions to the lowest level since July 7 as gains by the dollar against the euro curbed demand for the metal as an alternative investment. Jewelry usage in India, the world’s biggest buyer, rose 12 percent in 2011’s first quarter from a year earlier, according to World Gold Council figures.
“January and February are usually good months in India, and a lower gold price might attract some buyers,” said Marc Ground, a commodities strategist at Standard Bank Plc in Johannesburg. “While we haven’t seen physical demand pick up yet, maybe people are anticipating it for next year.”
Gold futures for February delivery climbed 1.8 percent to $1,568.40 an ounce on the Comex in New York by 7:59 a.m., ending the longest slump since March 2009. Prices are up 10 percent this year.
Dennis Gartman, the economist and editor of the Gartman Letter, is “about to become bullish” on gold after being neutral on the market since mid-November.
“We did not expect to see gold hold as well as it has or did in the past 24 hours,” Gartman wrote in his letter e-mailed today.
Holdings of gold in exchange-traded products are climbing for the first time in three weeks, according to data compiled by Bloomberg. Assets rose 0.3 percent this week after falling 1.5 percent the previous two weeks.
Silver for March delivery jumped 2.8 percent to $28.075 an ounce, bringing the 2011 drop to 10 percent, the first decline in three years. Palladium for March delivery climbed 1.7 percent to $637 an ounce, reducing the annual loss to 21 percent, the first retreat since 2008.
Platinum for April delivery advanced 1.3 percent to $1,386.50 an ounce. It’s down 22 percent this year.
Comex floor trading will be closed on Jan. 2 for New Year’s Day.
--Editors: Sharon Lindores, Dan Weeks
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