Tags: Gold | Silver | GDP | Downturn

Gold Jumps 1.1%, Silver Up 3.2% on GDP Downturn

Wednesday, 30 Jan 2013 03:28 PM

 

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Gold capped the biggest gain in almost three weeks after a report showed the U.S. economy unexpectedly shrank in the fourth quarter, boosting demand for the metal as a haven. Silver jumped the most since September.

Gross domestic product, the volume of all goods and services produced, dropped at a 0.1 percent annual rate, weaker than any forecast in a Bloomberg survey and the worst performance since the second quarter of 2009, government figures showed Wednesday. Policy makers will keep buying securities at the rate of $85 billion a month, the Federal Open Market Committee said Wednesday at the conclusion of a two-day meeting after the close of New York floor trading for gold.

“Clearly with the negative GDP, we’re seeing a flight to safety,” Tim Evans, the chief market strategist at Long Leaf Trading Group in Chicago, said in a telephone interview. “Growth has been fairly stable in recent quarters, but if we see more numbers like this, gold is going to have a good run.”

Gold futures for April delivery climbed 1.1 percent to settle at $1,681.60 an ounce at 2:01 p.m. on the Comex in New York, the biggest gain for a most-active contract since Jan. 10. Prices rose as much as 1.3 percent in electronic trading after the Fed’s announcement.

Silver futures for March delivery climbed 3.2 percent to $32.177 an ounce in New York, the biggest gain since Sept. 13.

Sales of American Eagle silver coins by the U.S. Mint jumped to a record this month on increased demand for an alternative to currencies as the U.S. central bank presses on with unprecedented stimulus. Sales surged to 7.42 million ounces so far in January, the biggest monthly total since 1986, when the Washington-based Mint began the transactions, Michael White, a spokesman, said in a telephone interview Tuesday.

On the New York Mercantile Exchange, palladium futures for March delivery gained 0.2 percent to $751.40 an ounce. Earlier, the metal reached $760.50, the highest since Sept. 9, 2011.

Platinum futures for April delivery rose 0.6 percent to $1,689.30 an ounce on the Nymex.

© Copyright 2014 Bloomberg News. All rights reserved.

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