Singapore - Precious metals surged as investors weighed the outlook for US interest rates, with gold climbing for a second day and palladium jumping by the most since 2010 as the dollar retreated.
Gold for immediate delivery climbed as much as 1.1% to $1 355.41 an ounce and traded at $1,354.14 at 2:52 p.m. in Singapore, according to Bloomberg generic pricing, as a gauge of the US currency fell to a one-week low.
Palladium climbed as much as 7.6% to $746.38 an ounce, the highest level since June 2015.
"Probably, the weaker dollar is pushing up gold and silver, and also platinum and palladium are being pushed up by that," Tetsu Emori, president of Emori Capital Management, said by phone from Tokyo.
Gold has rallied 28% this year and palladium is up 32% this year, with gains partly due to the Federal Reserve’s pause in raising borrowing costs after hiking them in December for the first time in almost a decade.
Lower rates are a boon for bullion, which doesn’t pay interest. While better-than-forecast US payrolls growth last week initially lifted the dollar, it’s since given up the gains as odds of a rate rise in 2016 remain below 50%.
'Still murky'
"While the optimistic data provided an initial boost to the dollar, the market remains skeptical of whether a September rate hike will materialize," Bryan Lum, a Singapore-based strategist with Phillip Futures, said in an e-mail.
"With the outlook over the longer term still murky, market participants are likely to continue diversifying into gold."
Investors will be monitoring US retail sales and jobless claims data due later this week, according to Lum.
Unless the numbers outperform by a wide margin, gold is expected to remain supported above $1,330, he said.
Holdings in gold-backed exchange-traded funds fell a second day to 2 035.1 metric tonnes on Tuesday, data compiled by Bloomberg show.
In China, bullion of 99.99% purity was 0.2% higher at 289.45 yuan a gram ($1,354.53 an ounce) on the Shanghai Gold Exchange.
On the Shanghai Futures Exchange, gold for December delivery rose 1.5% to 291.15 yuan a gram, while silver gained 2.7% to 4 458 yuan a kilogram.
Spot silver climbed 1.9%, while platinum advanced as much as 2.2% to $1 180.57 an ounce, the highest since April 2015.
Read Fin24's top stories trending on Twitter: Fin24’s top stories