Gold today rose to a 10-day high on increased central bank buying and signs of more investor demand following last week’s biggest drop in 30-year.
Gold rose by 1.1 per cent to $1,448.28 an ounce. It slumped 9.1 per cent on April 15, the most since February 1983. Silver also gained 0.8 per cent to $23.36 an ounce.
Russia and Kazakhstan expanded gold reserves for a sixth month in March, International Monetary Fund data showed. The volume for the Shanghai Gold Exchange’s benchmark contract has been more than four times last year’s daily average every day since April 16, while coin sales by the US Mint are heading for the highest since December 2009.
Bullion has fallen 14 per cent in 2013 after climbing for 12 years through 2012, tumbling to a two-year low of $1,321.95 on April 16. Prices are still about 7 per cent below the April 11 close of $1,561.45 that preceded the slump.
Assets held in the SPDR Gold Trust, the largest ETP, dropped to a 3 ½-year low of 1,092.98 tonnes yesterday and shrank 11 per cent this month.
“Some of the central banks might take this drop as an opportunity to buy as some physical players did,” said head of commodities research at UBS in Singapore. “The ETF selling, which is likely to continue in the short term, just caps the price.”
The US Mint’s gold coin sales totalled 196,500 ounces, up from 62,000 in March, the company data showed.