Bullion for immediate delivery added as much as 0.2% to $1 260.06 an ounce, the highest since March 22, and traded at $1 258.26 at 3:29pm in Singapore, according to Bloomberg generic pricing.
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Gold also benefited from a softer tone to stock markets, as a downbeat first batch of corporate results prodded European stock markets lower on Tuesday.
Global uncertainty has aided safe-haven assets like gold, while the introduction of looser monetary policies in Europe and Japan signalled to market participants that the economic recovery is vulnerable.
Platinum, which climbed to a one-month high on Tuesday at $1,001.88, was at $992.36 an ounce, down 0.4 per cent. Palladium was up 0.2 per cent at $545.50 an ounce.
“The ECB also increased its bond-buying purchases, and has not ruled out further measures”.
“(Gold) found the expected resistance at $1,255 and it was only when silver took off that it managed to get through.
Gold had its strongest quarter in 30 years in the three months to March, with the dollar on the back foot as investors scaled back expectations of rate hikes by the Federal Reserve. The dollar remained on the defensive today after slumping overnight to its lowest since August against a basket of major currencies and a 17-month low against the Japanese yen. The Fed will likely have to raise interest rate around four times this year, Richmond Fed President Jeffrey Lacker said on Tuesday. Markets have been expecting several U.S. interest rate rises, pushing the value of the dollar upwards.
Assets in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell on Friday. “We think the ratio will narrow further as price sensitive buyers who want to participate in precious metals, turn more to silver”.
“The fact that they’re rebuilding again is positive”, said James Steel, chief metals analyst for HSBC Securities in NY, referring to physically backed exchange-traded funds.
Paper gold holdings continue to set new yearly for the fifth straight day with ETF’s tracked by FastMarkets seeing inflows of 0.51 tonnes to a 2016 high of 1,813 tonnes.
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