Gold posts biggest monthly gain in three years on haven demand

Gold futures rose Friday, capping the biggest monthly gain in three years, after US government data showed the economy expanded at a slower pace than forecast in the fourth quarter, reigniting demand for the metal as a haven.
A widening trade gap limited expansion for gross domestic product as imports climbed three times faster than exports, US Commerce Department figures showed.
The metal extended gains as US equities fell on economic concerns, adding to gold’s appeal as an alternative investment.
Futures rose the most in two weeks amid speculation that weaker foreign economies will be a drag on American growth, prompting the Federal Reserve to wait longer before raising interest rates. Assets in global exchange-traded products backed by gold climbed for 10 straight sessions to the highest since October, data compiled by Bloomberg show.
“Gold has found a bit more of a bid with the lower-than- expected GDP number,” David Meger, the director of metal trading at HighRidge Futures LLC in Chicago, said in a telephone interview.
“The Fed can be more patient in raising rates, and that’s supportive for precious metals.”
On the Comex, gold futures for April delivery rose 1.9 percent to settle at $ 1,279.20 an ounce at 1:56 p.m. in New York, the biggest advance since Jan. 15. This month, the metal increased 8 percent, the most since January 2012.
The economic figures Friday helped revive speculation that the US expansion will be hampered by slowdowns in Europe and Asia. On Jan. 29, gold tumbled 2.4 percent, the most since 2013, after the Fed a day earlier raised its assessment of the US economy and labor market. This week, the metal dropped 1.1 percent.
“The buyers don’t see a lot of sellers because they were exhausted from yesterday,” George Gero, a precious-metal strategist at RBC Capital Markets in New York, said in a telephone interview.
US ETPs backed by precious metals took in $ 1.9 billion this month through Jan. 28, the first inflow since July and the most since September 2012, data compiled by Bloomberg show.
Silver futures for March delivery rose 2.6 percent to $ 17.208 an ounce on the Comex. This month, the price jumped 10 percent, the most since June.
On the New York Mercantile Exchange, platinum futures for April delivery increased 1.7 percent to $ 1,238.20 an ounce. In January, the gain of 2.4 percent snapped a six-month slump, the longest since January 1997.
In January, the spot gold-platinum ratio headed for the biggest gain since September 2011, according to Bloomberg generic prices. The spread widened for the sixth straight month, the longest run since December 2011.
Palladium futures climbed 0.1 percent to $ 772.40 on the Nymex. This month, the metal dropped 3.3 percent.
(c) 2015, Bloomberg News.

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