Gold triumphs among metals with best monthly rally

Johannesburg - For most commodity investors, January was one more bad month in a years-long bear market. Gold was the exception.

Bullion for immediate delivery rallied 5% in January, the best gain in a year. The returns were far better in stocks, with an index of South African producers jumping 33% for the month, the most since 1998.

Turmoil across Chinese financial markets, plunging oil prices and signs of softening economic growth in the US left investors reeling in January, boosting demand for traditional safe-haven assets like gold. While losses deepened in other metals, gold outperformed and holdings in exchange-traded funds backed by bullion climbed to the highest since November.

“This year has seen tough equity markets, starting in China and spreading across the world, with the S&P entering bear territory," Simona Gambarini, a commodities economist at Capital Economics in London, said by phone. "That’s affected gold in a positive way."

On Friday, gold prices slipped as stocks rallied around the world after the Bank of Japan surprised investors by adopting negative interest rates. Prices slid 0.3% to $1 111.90 an ounce as of 13:50.

Gold stocks were propelled higher during January, especially in South Africa as the weaker rand boosted profit margins. Harmony Gold soared 84%, recovering from the lowest levels in two decades. The company probably made about R100 000 for every kilogram of gold produced this quarter, from a loss of R14 000 a kilogram a year ago.

For the week, platinum rallied 3.6%, the most in two months.

The market will stay in a shortage in the next six years as supplies remain constrained amid growing or robust demand from jewelers and car companies, according to a report commissioned by the World Platinum Investment Council.

• Silver for immediate delivery was little changed at $14.238 an ounce in London on Friday.

• Platinum slipped 0.2%, while palladium rose 0.5%.