July 16 (Bloomberg) -- Gold futures rebounded from a three- week low as imports by India, the world’s second-largest user, surged 65 percent last month.
Inbound shipments climbed to $3.12 billion in June, from $1.89 billion a year earlier, the Commerce Ministry said in an e-mailed statement today. Federal Reserve Chair Janet Yellen told the House Financial Services Committee today that the Fed hasn’t met its mandate to achieve full employment and stable prices while affirming that “a high degree of monetary policy accommodation remains appropriate.”
The Reserve Bank of India allowed more companies to import gold after curbs on purchases imposed in 2013 helped narrow a current-account deficit. Gold rebounded 8.1 percent this year, after posting the biggest loss in more than three decades in 2013, as U.S. policy makers pledged to keep interest rates low and as unrest in the Middle East and Ukraine spurred demand for a haven.
“Any time we see stronger imports, it’s going to be a bullish factor because India is one of the largest bullion buyers,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said in a telephone interview. “Prices are stabilizing now. We’re all trying to figure out when the Fed is going to raise rates.”
Gold futures for August delivery gained 0.2 percent to settle at $1,299.80 an ounce at 1:30 p.m. on the Comex in New York, snapping three straight declines.
Yesterday, prices touched $1,292.60, the lowest since June 19. China is the biggest gold consumer.
Yellen has said interest rates are likely to stay low for a considerable period after the Fed ends its asset-purchase program, which she said could happen following the October meeting. The Fed has reduced its monthly bond buying to $35 billion, from $85 billion in December, as the economy strengthens.
The drop this week took prices below the 100-day moving average for the first time since mid-June. The move signals declines to some traders who study price charts.
“With the break below $1,300 an ounce and technical weakness, further losses for gold are likely,” James Steel, an analyst at HSBC Securities (USA) Inc., said in a note.
Silver futures for delivery in September fell 0.5 percent to $20.775 an ounce on the Comex, a fourth straight decline and the longest slump since May 30.
On the New York Mercantile Exchange, palladium futures for September delivery rose 0.9 percent to $876.75 an ounce. Platinum futures for October delivery added less than 0.1 percent to $1,485.70 an ounce.
--With assistance from Phoebe Sedgman in Melbourne, Glenys Sim in Singapore and Nicholas Larkin in London.