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Singapore - Gold headed for a third weekly advance as concern the UK may vote to leave the European Union and the US Federal Reserve’s decision to hold off on raising interest rates boost demand for the precious metal.
Bullion for immediate delivery rose as much as as 0.6% to $1 286.31 an ounce before trading at $1 282.73 by 08:48, according to Bloomberg generic pricing. The metal touched $1 315.71 on Thursday, the highest since August 2014.
Prices are up 0.7% this week and 21 percent for the year, as gold benefits from haven demand. Fed chair Janet Yellen said Wednesday the June 23 Brexit referendum was a factor in the central bank’s decision to keep interest rates on hold this week as it reined in its projection for increases over the next two years.
“This week’s edition of the Fed’s ‘will they, won’t they’ soap opera has confirmed what we knew all along - that economic conditions in the US won’t support a rate rise,” Gavin Wendt, director and senior resource analyst at MineLife Pty in Sydney, said by email. Concern about the strength of the US economy and international events such as the Brexit vote in Britain have helped support gold, he said.
Prices fell Thursday after the murder of a British lawmaker who had campaigned to remain in the EU.
The death of Jo Cox, the first killing of a UK member of Parliament since the days of Irish Republican terrorism, may push voters toward remaining in the bloc, which would be a balm for financial markets and reduce demand for bullion.
In China, bullion of 99.99% purity lost 2% to $1 283.96 an ounce on the Shanghai Gold Exchange.
Holdings in gold-backed exchange-traded funds added 4.2 metric tons to 1,887.4 tons as of Thursday, the highest since October 2013, data compiled by Bloomberg show. They’ve risen for a 13th straight day. Assets in silver ETFs are at record levels. Spot silver rose 0.7%, palladium climbed 1.2% and platinum added 0.5%.
