Gold Little Changed After Gain to 7-Month High Prompts Selling

By Glenys Sim

Feb. 20 (Bloomberg) -- Gold traded little changed in Asia as the metal’s gain to a seven-month high this week prompted some investor selling. Platinum declined.

The metal climbed to $987.71 an ounce Feb. 18, the highest since July, on demand from investors to preserve their wealth as central banks pump trillions of dollars into the world’s financial system. Gold is up 11 percent this year, compared with a 15 percent loss in Asia’s benchmark MSCI Asia Pacific Index.

“The gold price eased following solid gains in recent days, influenced by profit taking,” David Moore, chief commodity strategist at Commonwealth Bank of Australia, said in an e-mail today. “The high gold price may have also left some investors more cautious.”

Immediate-delivery gold was little changed at $974.47 an ounce at 2:25 p.m. in Singapore. Silver climbed 0.4 percent to $14.09 an ounce.

Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, gained to a record 1,028.98 metric tons yesterday. The fund’s gold holdings are just behind the 1,040 tons held by Switzerland, the sixth-largest stockpile.

“Buying gold via ETPs shows no sign of slowing and for now is more than enough to offset weakness in jewelry demand,” Barclays Capital analysts led by Gayle Berry and Suki Cooper, wrote in a note yesterday. “We expect this buying to continue, resulting in gold hitting fresh highs later this year.”

Platinum Falls

Platinum traded 0.4 percent higher at $1,072.75 at 2:40 p.m. in Singapore. The metal used in catalytic converters is little changed on the week. Palladium was down 0.2 percent at $215.50 an ounce.

General Motors Corp. and Chrysler LLC this week forecast an auto-industry slump this year. Detroit-based GM said sales will drop as low as 9.5 million vehicles from 13.2 million last year and an average of 16.1 million during the previous decade.

“The underlying demand in platinum is terrible,” Michael Jansen, an analyst at JPMorgan Securities Ltd. in London, said in an e-mail. “Other than the associated bullishness arising from the price action in gold there is little to be said that is bullish for the platinum market.”

To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net