By Glenys Sim
July 1 (Bloomberg) -- Gold gained in Asia, extending its third quarterly increase, as jewelers and other physical buyers were attracted by the precious metal’s drop below $940 an ounce.
The National Spot Exchange Ltd. in India, the world’s largest consumer, yesterday launched small-denomination contracts to lure households to trade physical gold. Turkey, the world’s third-largest manufacturer of gold jewelry in 2007, imported $125 million worth of the metal in the past three weeks as the wedding season boosts demand, according to a report in Turkish newspaper Referans yesterday.
“We see a little bit of physical buying emerge whenever the market dips, but in the near term, gold will continue to trade in the $920 to $950 range,” said Adrian Koh, an analyst at Phillip Futures in Singapore. “In the longer term, gold remains supported by inflation expectations.”
Gold for immediate delivery rose as much as 0.4 percent to $930.41 an ounce and traded at $929.25 at 2:08 p.m. in Singapore. The metal dropped as much as 1.5 percent yesterday, and is up 5.3 percent this year.
Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, dropped 5.2 metric tons to 1,120.55 tons yesterday, according to the company’s Web site.
Still, a rebound in the dollar may limit gold’s gains as the metal maintains its inverse relationship to the currency, said Koh. The dollar index, which tracks the greenback against six major currencies, gained for a second day after a report showed an unexpected drop in U.S. consumer confidence for June, increasing demand for the world’s main reserve currency.
Among other precious metals for immediate delivery, silver climbed 0.2 percent to $13.625 an ounce, platinum fell 0.4 percent to $1,172.50 an ounce and palladium lost 0.6 percent to $249.25 an ounce as of 2:10 p.m. in Singapore.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
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