Feb. 20 (Bloomberg) -- Gold advanced, snapping a five-day losing run, on speculation that the U.S. central bank may prolong stimulus in the world’s largest economy amid a weaker- than-expected recovery.
Spot gold gained as much as 0.3 percent to $1,609.25 an ounce and was at $1,607.40 at 2:03 p.m. in Singapore before the release later today of minutes from the Federal Reserve’s latest policy meeting. The price dropped to $1,598.23 on Feb. 15, the lowest since Aug. 15. Bullion for April delivery rose 0.2 percent to $1,606.70 an ounce on the Comex as the dollar fell.
While claims for jobless benefits in the U.S. have declined this month, industrial production shrank in January. Confidence among U.S. homebuilders dropped in February from a more than six-year high, according to a report yesterday. The Federal Open Market Committee will release minutes from the Jan. 29-30 meeting, which may detail members’ views on the timeframe for ending debt purchases, known as quantitative easing.
“Economic problems haven’t gone away and they won’t go away anytime soon,” said Gavin Wendt, a director at Mine Life Pty in Sydney. “People are looking for whether the economy is standing on its own two feet, and what is the Fed doing in terms of pulling back.”
Gold has slumped 4.1 percent this year on signs economies from the U.S. to China are improving, and after filings showed billionaire investors including George Soros pared holdings last quarter. The run of five daily losses to yesterday was the worst streak since January 2011.
The minutes of the Fed’s Dec. 11-12 meeting, released on Jan. 3, showed members were divided between a mid- or end-of- year end to easing. The central bank said in a statement after the January meeting that it’s still committed to buying about $85 billion of government and mortgage securities a month.
The Dollar Index, a gauge against six counterparts, declined as much as 0.2 percent today, dropping for a second day. Gold usually trades counter to the U.S. currency.
Cash bullion of 99.99 percent purity fell 0.4 percent to 325.64 yuan a gram ($1,622.80 an ounce) on the Shanghai Gold Exchange. Most-active futures dropped 0.2 percent to 29,983 rupees per 10 grams ($1,724.56 an ounce) on the Multi Commodity Exchange of India Ltd.
Platinum for immediate delivery fell 0.4 percent to $1,687.50 an ounce. Silver for immediate delivery climbed 0.3 percent to $29.5631 an ounce. Palladium was little changed at $764.90 an ounce.
--Editors: Ovais Subhani, Thomas Kutty Abraham