Dec. 24 (Bloomberg) -- Gold gained for the second time in three sessions on speculation that this month’s price drop may spur more physical buying and as violence escalated in South Sudan.
Bullion closed at $1,193.60 an ounce on Dec. 19, the lowest settlement since August 2010, after the Federal Reserve said it will reduce economic stimulus. Prices are down 3.8 percent in December, heading for the fourth straight monthly decline. Trading today was 69 percent lower than the average for the past 100 days for this time of day, according to data compiled by Bloomberg. Fighting in South Sudan has killed at least 500 people.
“Expectations of some physical demand after the huge drop is helping prices on this very thinly traded day,” Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago, said in a telephone interview. “Also, the violence in Sudan is supportive,” boosting demand for the metal as an investment hedge, he said.
Gold futures for February delivery rose 0.5 percent to settle at $1,203.30 at 12:38 p.m. on the Comex in New York. Prices have tumbled 28 percent this year, set for the worst annual drop since 1981, as equities rallied and the Fed said it will cut monthly asset purchases to $75 billion from $85 billion.
Silver futures for March delivery added 0.4 percent to $19.484 an ounce on the Comex. On the New York Mercantile Exchange, palladium futures for March delivery slipped less than 0.1 percent to $695.45 an ounce. Platinum futures for April delivery rose 0.6% to $1,336.60 an ounce.
There will be no floor or electronic trading tomorrow due to the Christmas holiday.
--With assistance from Phoebe Sedgman in Melbourne. Editors: Thomas Galatola, Steve Stroth