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Gold futures trade near two-week high on China interest-rate cut
[NEW YORK] Gold futures were little changed after reaching the highest in almost two weeks after a surprise cut in interest rates in China, the world's second-largest consumer.
The People's Bank of China lowered the benchmark lending and deposit rates by a quarter per centage point on Saturday. Gold imports by India, the top consumer, may jump to 100 metric tons in March from about 25 tons in February, according to Rajesh Mehta, chairman of Rajesh Exports Ltd.
"China's action is keeping gold supported," Tai Wong, the director of commodity products trading at BMO Capital Markets Corp in New York, said in a telephone interview. "Also, reports about higher imports by India are positive."
Gold futures for April delivery rose less than 0.1 per cent to US$1,213.60 an ounce at 9:45 am on the Comex in New York. Earlier, the metal reached US$1,223, the highest for a most- active contract since Feb 17.
The "surprise" cut in Chinese rates "is expected to lift demand for physical gold," Kitco Metals Inc in Montreal said in a report.
Prices pared gains after US consumer purchases adjusted for inflation rose in January. The 0.3 per cent increase followed a 0.1 per cent drop the prior month, a Commerce Department report showed on Monday.
Gold climbed 70 per cent from December 2008 to June 2011 as central banks increased money supply on an unprecedented scale, spurring concerns that inflation would accelerate.
In 2014, the metal posted a consecutive annual decline for the first time since 1998 as the dollar rallied amid concern the Federal Reserve will raise US borrowing costs.
Silver futures for May delivery rose 0.2 per cent to US$16.585 an ounce.