LONDON: Gold gained nearly one percent in thin year-end holiday trade yesterday, but was still set for its biggest annual loss in three decades as investors switch to rallying equities on optimism about a global economic recovery.
Signs that the US labour market is improving — data showed weekly jobless claims decreased 42,000 to a seasonally adjusted 338,000 last week — propelled the price of more industrial precious metals higher, with spot platinum heading for its biggest daily gain since October 17, up two percent.
Spot gold, flat initially, rose as much as 0.9 percent to a one-week high of $1,215.70 an ounce earlier and was trading up 0.8 percent to $1,213.60 by 1519 GMT. US gold futures for February delivery also rose 0.9 percent to $1,214.40.
Bullion fell to a six-month low of $1,185.10 last week after the Fed said it would begin tapering its $85 billion in monthly bond purchases next month, before recovering slightly. And traders betting the metal’s price would endure further losses were this week forced to cover their short positions, analysts said.
Gold is headed for a near 30 percent slump in 2013, ending a 12-year rally prompted by rock bottom interest rates and measures taken by global central banks to prop up the economy.
The decline this year is set to be gold’s biggest annual loss since 1981, while current prices are 37 percent below an all-time high of $1,920.30 hit in 2011. Several brokerages such as Goldman Sachs, BNP Paribas and Societe General expect gold prices to drop below $1,150 in 2014.
In other precious metals, silver rose 2.3 percent to $19.94 an ounce, having earlier touched its highest level since December 18 at $20.02. The metal is however down 36 percent for the year.
Reuters
