Most Asia Stocks Climb on Rising Commodities, U.S. Sales Data; Sanyo Falls

Most Asian stocks advanced, with the regional index near a 2 1/2-year high, as commodity producers gained after copper climbed to a record, crude oil rose and U.S. retail sales increased last week, adding to signs the economic recovery is on track.

Canon Inc., the world’s largest maker of cameras that gets about 28 percent of sales from the U.S., increased 1.9 percent in Tokyo. BHP Billiton Ltd., the world’s biggest mining company and Australia’s largest oil and has produced, climbed 0.9 percent in Sydney. Mitsui & Co., which counts commodities as its biggest source of profit, gained 0.7 percent. Sanyo Electric Co., a maker of rechargeable batteries, slumped 5.1 percent after its parent Panasonic Corp. announced plans to delist the company.

“The world economy is recovering moderately,” said Naoki Fujiwara, who helps oversee $6 billion in Tokyo at Shinkin Asset Management Co. “Investors see money is flowing into stocks and commodities, boosting confidence in the market.”

The MSCI Asia Pacific Index rose 0.1 percent to 134.94 as of 4:37 p.m. in Tokyo, with about the same number of stocks rising and falling. The gauge climbed to its highest level since July 2008 on Dec. 14 as U.S. economic reports boosted confidence in a global recovery, easing concerns that Europe’s debt crisis and China’s measures to slow inflation will hurt growth.

Japan’s Nikkei 225 Stock Average dropped 0.2 percent, erasing gains of as much as 0.2 percent, after the government said it is becoming more pessimistic about exports and business sentiment. Japan’s export growth accelerated for the first time in nine months in November, data released today showed.

South Korea’s Kospi Index, Australia’s S&P/ASX 200 Index and New Zealand’s NZX 50 Index climbed each climbed 0.1 percent. Taiwan’s Taiex Index gained 0.4 percent. China’s Shanghai Composite Index declined 0.9 percent as an increase in gasoline and diesel prices sparked concern inflation will accelerate.

Recovery Trend

Futures on the Standard & Poor’s 500 Index were little changed today after Nike Inc., the world’s largest maker of athletic shoes, reported orders that fell short of analysts’ estimates and chip maker Xilinx Inc. forecast sales will drop.

The measure rose 0.6 percent yesterday in New York to 1,254.60, surpassing its closing level on Sept. 12, 2008, the last trading day before Lehman Brothers Holdings Inc. filed the world’s biggest bankruptcy.

Same-store sales at a selection of U.S. retailers rose 4.2 percent last week, the biggest jump of this holiday season, as more consumers finished shopping, according to a survey of retailers released yesterday.

“U.S. economic indicators continue to exceed expectations and the U.S. economy is on a recovery trend,” said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc. “The global economic recovery, surplus money and confidence in government measures are boosting commodity prices.”

Canon, HTC

Gauges of information technology companies, energy and raw material producers led the advance among the 10 industry groups in the MSCI Asia Pacific Index.

Canon climbed 1.9 percent to 4,265 yen. HTC Corp., the Taiwanese mobile phone maker that counts America as its biggest market, increased 4.1 percent to NT$914. Hyundai Motor Co., South Korea’s biggest carmaker, gained 2.3 percent to 181,500 won in Seoul.

BHP Billiton advanced 0.9 percent to A$45.82 in Sydney. Mitsui & Co. climbed 0.7 percent to 1,325 yen. Noble Group Ltd., a Hong Kong-based supplier of agricultural and industrial commodities, rose 1 percent to S$2.09 in Singapore.

Crude oil for February delivery gained 45 cents to $89.82 a barrel in New York yesterday, the highest settlement since Oct. 7, 2008. The London Metal Exchange Index of six metals including copper and aluminum climbed 1.8 percent yesterday, rising for a third day. Copper, rubber and cotton prices rose to record levels overnight.

Rig Order

In Singapore, Sembcorp Marine Ltd., the world’s second- largest oil-rig builder, climbed 2 percent to S$5.09. The company said it won an order two build two jack-up rigs, valued at $400 million, from Noble Corp., the world’s third-largest deep-water oil and gas driller.

The MSCI Asia Pacific Index increased 12 percent this year through yesterday, compared with gains of 13 percent by the S&P 500 and 11 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 14.8 times estimated earnings on average at yesterday’s close, versus 14.7 times for the S&P 500 and 12.4 times for the Stoxx 600.

Among stocks that fell, Sanyo Electric slumped 5.1 percent to 130 yen in Tokyo, its lowest close since July 28. Controlling shareholder Panasonic Corp. said it will give minority shareholders 0.115 shares each Sanyo share as part of plans to delist its 81 percent-owned subsidiary. Panasonic fell 1.5 percent to 1,152 yen.

Australian Luxury Homes

Lend Lease Group, Australia’s No.1 developer, dropped 1.1 percent to A$8.65 in Sydney after Deutsche Bank AG lowered its rating to “hold” from “buy.”

The stock also fell after the Real Estate Institute of Australia predicted that prices of luxury homes in the country will drop next year as homes worth at least A$1 million ($1 million) listed for sale increase. Leighton Holdings Ltd., Australia’s largest construction company, fell 2 percent to A$31.52.

Wilmar International Ltd., the world’s biggest palm-oil trader, dropped 4.6 percent to S$5.65 in Singapore after saying it will invest 889.2 million yuan ($134 million) in a joint venture with Kerry Properties (China) Ltd. and Shangri-La China Ltd. to develop a hotel in China’s Liaoning province.

“We believe that the market may take this announcement negatively,” Goldman Sachs Group Inc. analysts Patrick Tiah and Nikhil Bhandari wrote in a note to clients today. “This appears to be a sharp departure from Wilmar’s agri-processing core business and there may be concerns on management losing focus.”

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net. Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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U.S. Stocks Erasing Loss Since Lehman Failure Fuels 2011 Bulls

The benchmark gauge for American stocks rose 0.6 percent to 1,254.6 yesterday, surpassing its closing level of 1,251.70 on Sept. 12, 2008. Photographer: Jin Lee/Bloomberg

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Dec. 21 (Bloomberg) -- Bloomberg's Courtney Donohoe reports on the performance of the U.S. equity market today. Stocks rose, completing the Standard & Poor’s 500 Index’s recovery from the plunge that followed Lehman Brothers Holdings Inc.’s collapse in 2008, after Adobe Systems Inc.’s forecast added to speculation that the fastest profit growth in 22 years makes equities a bargain. Bloomberg's Pimm Fox also speaks. (Source: Bloomberg)

The advance that lifted the Standard & Poor’s 500 Index above its level before the collapse of Lehman Brothers Holdings Inc. in September 2008 is an encouraging sign for bulls, technical analysts said.

The benchmark gauge for American stocks rose 0.6 percent to 1,254.6 yesterday, surpassing its closing level of 1,251.70 on Sept. 12, 2008, the last trading session before Lehman Brothers filed the world’s biggest bankruptcy. After closing within 1 percent of the milestone on five of the six previous days, the index may now have room to rise, according to analysts who base forecasts on price charts.

“It’s a psychological and technical victory for the market,” said Christopher Verrone, lead technical analyst at New York-based Strategas Research Partners. “It strengthens the case that 2011 might be better than a lot of people expect.”

U.S. government and Federal Reserve spending to stimulate the economy and 70 percent of S&P 500 companies beating profit estimates for a record six straight quarters pushed the S&P 500 up 85 percent since March 2009. The index will end 2011 at 1,374, according to the average projection of 11 strategists at Wall Street’s biggest banks, producing the biggest three-year rally since 1997-1999.

Losses for the S&P 500 totaled 46 percent between Lehman’s failure and March 9, 2009, as the worst recession since the 1930s intensified. The index started to rebound three months before the contraction ended in June 2009, according to the National Bureau of Economic Research. It has to climb 25 percent to surpass its October 2007 record high of 1,565.15.

‘Starting Gun’

In the week of Lehman’s bankruptcy, Bank of America Corp. took over Merrill Lynch & Co. as it teetered on collapse and the government seized American International Group Inc. The S&P 500 surged in the final two days of that week after the government announced a plan to purge banks of bad assets and crack down on short sellers.

“Lehman Brothers was really the starting gun for creating this sense of fear, and we still haven’t fully overcome that fear but we’re in a healing process,” said Jeffrey Coons, president of Manning & Napier Advisors Inc. in Fairport, New York, which manages $35 billion. “The aggressive moves of the Fed right after Lehman and ongoing today have been an important driver for the stabilization of stock prices.”

The S&P 500, up 13 percent in 2010, has advanced 6.3 percent in December after losing 0.2 percent in November and posting a combined gain of 13 percent in September and October, the biggest increases during those months since 1998. The measure has rallied 20 percent since Fed Chairman Ben S. Bernanke suggested on Aug. 27 that he was prepared to purchase bonds to spur economic growth.

Tax Cuts, GE

The MSCI World Index, a gauge of 1,660 shares in 24 developed nations from the U.S. to Hong Kong, is within 1 percent of wiping out its 46 percent drop since Lehman’s collapse. The index has gained 85 percent since March 2009 as central banks worldwide maintained record-low interest rates and governments spent trillions of dollars to spur growth.

Should the MSCI World erase its loss, “it would be a positive and bullish development,” said Christian Bendixen, director of technical research at New York-based Bay Crest Partners LLC. “It has psychological and anecdotal significance.”

The S&P 500 has risen 13 of the past 16 weeks. The last time that happened was in 2004, according to Howard Silverblatt, S&P’s New York-based senior index analyst. The December advance was buoyed by an agreement between President Barack Obama and Republican lawmakers to extend tax breaks, and by reports showing consumer confidence, retail sales and manufacturing beat economists’ forecasts.

Priceline, Ford

Consumer stocks in the S&P 500 such as online travel agency Priceline.com Inc. and Dearborn, Michigan-based Ford Motor Co., had recovered all their losses from New York-based Lehman Brothers by March 4. The S&P 500 Consumer Discretionary Index has surged 21 percent since then.

Priceline, based in Norwalk, Connecticut, has surged almost five-fold since September 2008 to $407, bolstered by a rebound in hotel stays and international travel. Ford, the world’s most profitable automaker and the only major U.S. car company to avoid bankruptcy last year, more than tripled to $16.99 as demand for pickups and sport-utility vehicles revived.

Analysts forecast that S&P 500 earnings will total $85.33 a share in 2010, up 38 percent from $61.77 a share in 2009, according to the average projection in a Bloomberg survey. That’s the biggest increase since 1988, Bloomberg data show.

“The market is responding to earnings,” said Hayes Miller, the Boston-based head of asset allocation in North America at Baring Asset Management Inc., which oversees about $50.6 billion. “It’s a commentary on corporate flexibility, the ability of companies to cut costs and increase productivity. This looks like it can last through 2011.”

To contact the reporters on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net; Inyoung Hwang in New York at ihwang7@bloomberg.net.

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.

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Oil Rises for a Fourth Day as U.S. Economic Recovery May Spur Fuel Demand

Crude rose for a fourth day as signs of U.S. economic recovery stoked speculation that fuel demand will increase in the world’s largest oil consumer.

Futures climbed as much as 0.5 percent to trade near the highest in two years before a report forecast to show the U.S. economy expanded more than estimated earlier. Holiday-season retail sales jumped, according to data released yesterday. Prices also gained after the American Petroleum Institute said crude inventories shrank a fourth week.

“Oil prices have been well supported above $80 a barrel since around October,” said Selena Ling, head of treasury research at Oversea-Chinese Banking Corp. in Singapore. “People are growing more confident that the U.S. is not entering a double dip recession.”

Crude oil for February delivery rose as much as 45 cents to $90.27 a barrel in electronic trading on the New York Mercantile Exchange and was at $90.24 at 4:14 p.m. Singapore time. Prices have climbed 14 percent this year.

Yesterday, futures gained 1.1 percent to $89.82 a barrel, the highest settlement since Oct. 7, 2008. That was 2 cents below a long-term resistance level on technical charts, the 50 percent Fibonacci retracement of the drop to $32.40 in December 2008 from a record high of $147.27 in July that year.

U.S. GDP grew 2.8 percent in the third quarter, up from an estimate of 2.5 percent last month, based on the median forecast economists surveyed by Bloomberg before a Commerce Department report.

Crude Supplies

Prices gained after the industry-funded American Petroleum Institute reported yesterday that U.S. crude-oil supplies declined 5.8 million barrels to 342 million last week. Gasoline inventories dropped 2.9 million while middle distillates increased 16,000 barrels, the API said.

“There’s no doubt that we’ve seen a tightening in the market’s balance over the last few months,” Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, said in a Bloomberg Television interview. “A lot of it does depend on what you see for the demand picture going forward.”

Crude also rose after U.S. holiday retail sales data, a key economic indicator, advanced. Same-store sales at a selection of U.S. retailers posted their biggest holiday jump, according to a chain-store sales index released yesterday by the New York-based International Council of Shopping Centers and Goldman Sachs Group Inc.

Heating Oil

The Department of Energy will release its own oil-inventory report in Washington today. The data may show U.S. crude stockpiles fell last week as refiners on the Gulf Coast reduced their assets for tax savings at the end of the year, according to a Bloomberg survey.

Supplies dropped 3.4 million barrels in the seven days ended Dec. 17 from 346 million, based on the median estimate of 14 analysts. Stockpiles in the previous week slumped 9.85 million as imports fell.

Gasoline inventories may have increased 1.5 million barrels from 214.8 million, the survey showed. Analysts were split over whether stockpiles of distillate fuel, a category that includes heating oil and diesel, declined or gained.

Brent crude oil for February settlement rose as much as 46 cents, or 0.5 percent, to $93.66 a barrel on the London-based ICE Futures Europe exchange. It gained 46 cents, or 0.5 percent, to end the session at $93.20 a barrel yesterday, the highest settlement since Oct. 1, 2008.

To contact the reporter on this story: Ann Koh in Singapore at akoh15@bloomberg.net

To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net

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Stocks Rising 17% Since Bernanke Disclosed QE2 Disarms Fed's Worst Critics

Ben S. Bernanke, chairman of the U.S. Federal Reserve. Photographer: Joshua Roberts/Bloomberg

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Dec. 16 (Bloomberg) -- John Taylor, a professor of economics at Stanford University and a former Treasury undersecretary, discusses Federal Reserve monetary policy and the outlook for U.S. economic recovery. Taylor speaks with Tom Keene on Bloomberg Television's "Surveillance Midday." (Source: Bloomberg)

Republican leaders in Congress say they have “deep concerns” about Ben S. Bernanke’s second round of quantitative easing. The U.S. stock and credit markets don’t share those reservations.

The Standard & Poor’s 500 Index has climbed 17 percent since the Federal Reserve chairman first indicated on Aug. 27 that the central bank might buy more securities to boost the economy. Junk bonds rallied, with the extra yield that investors demand to own the securities instead of government debt shrinking to 5.45 percentage points yesterday from 6.81 points, according to Bank of America Merrill Lynch index data.

“It has been successful,” Peter Hooper, chief economist at Deutsche Bank Securities Inc. in New York, said of Bernanke’s policy of pumping money into the financial system, dubbed QE2. “It’s contributed to the rally in the stock market” and has “been important in reducing substantially the downside risk of deflation.”

Economic reports signal the recovery is gaining strength. A bigger-than-projected increase in retail sales in November prompted Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, to raise his outlook for fourth-quarter consumer spending. Industrial production in November also exceeded forecasts, and a gauge of consumer confidence rose to a six-month high in December.

The data, coupled with the prospect Congress will pass an $858 billion plan to extend Bush-era tax cuts, has prompted economists to boost their estimates for growth next year. The economy will expand by 2.6 percent in 2011, according to the median forecast in a Bloomberg News survey of 66 economists this month, up from a 2.5 percent prediction in November.

Confidence Grows

“As people get more confident about the economy, money is coming into the stock market,” said Jeremy Siegel, a finance professor at the University of Pennsylvania’s Wharton School in Philadelphia. “The most important way quantitative easing works is the provision of liquidity.”

New York Fed President William Dudley said Oct. 1 that asset purchases would reduce borrowing costs and support the value of homes and stocks, leaving consumers with more money to spend and lowering the cost of capital for businesses.

The extra yield investors demand to own investment-grade corporate bonds instead of government debt narrowed to 1.7 percentage points yesterday from 1.91 percentage points on Aug. 27, Bank of America Merrill Lynch index data show.

“Markets in general have moved in a growth-friendly direction,” said Dean Maki, chief U.S. economist at Barclays Capital in New York.

Contrast With Summer

The latest economic data are in contrast to a drumbeat of negative economic reports last summer, including declines in home sales and payrolls, that prompted economists such as Harvard University’s Martin Feldstein to warn that the risks of a renewed recession were rising.

On Aug. 27, Bernanke said the Fed “will do all that it can” to support the recovery and signaled it was ready to start a second round of securities purchases, in addition to the $1.7 trillion it bought through last March to pull the nation out of the worst recession since the Great Depression.

The Fed’s Nov. 3 announcement that it will buy $600 billion of Treasuries through June came a day after Congressional elections gave Republicans a majority of seats in the House of Representatives.

‘Dangerous Experiment’

Sarah Palin, the 2008 vice presidential nominee who says she’s considering a run for president in 2012, wrote to the Wall Street Journal last month, saying “it’s time for us to ‘refudiate’ the notion that this dangerous experiment in printing $600 billion out of thin air, with nothing to back it up, will magically fix economic problems.”

Representative John Boehner of Ohio, nominated to be House speaker, and three other Republican leaders sent Bernanke a letter Nov. 17 expressing “our deep concerns over the recent announcement that the Federal Reserve will purchase additional U.S. Treasury bonds.”

“Such a measure introduces significant uncertainty regarding the future strength of the dollar and could result both in hard-to-control, long-term inflation and potentially generate artificial asset bubbles that could cause further economic disruptions,” they wrote.

Since then, the dollar has gained about 1.8 percent against the currencies of six major trading partners as measured by IntercontinentalExchange Inc.’s Dollar Index as of 1:19 p.m. in New York. The dollar is down 2.9 percent since Aug. 27.

The cost of living increased 0.1 percent in November, less than forecast, indicating higher prices for commodities aren’t filtering through into other goods and services, according to a Dec. 15 Labor Department report.

Seen as Favorable

“We don’t expect a rapid move higher in inflation anytime soon,” said Maki, who was the No. 2 forecaster overall for the U.S. economy in the two-year period ended on Sept. 30, according to data compiled by Bloomberg. “What we’re expecting is a very gradual upward trend that is likely to be seen by the Fed as favorable.”

Policy makers are concerned that too-low inflation will push up borrowing costs and increase the risk of deflation, or a debilitating decline in prices that boosts debt and reduces wages and profits.

The Fed’s policies have led inflation expectations to increase. The breakeven rate for 10-year Treasury Inflation Protected Securities, the yield difference between the inflation-linked debt and comparable maturity Treasuries, has risen to 2.3 percentage points from 1.63 percentage points on Aug. 27, according to data compiled by Bloomberg. The rate is a measure of the outlook for consumer prices over the life of the securities.

Diminished Risk

“Because the Fed is acting, I would say the risk is pretty low” of deflation, Bernanke said in an interview with CBS Corp.’s “60 Minutes” program broadcast Dec. 5. “But if the Fed did not act, then given how much inflation has come down since the beginning of the recession, I think it would be a more serious concern.”

Not every indicator is going Bernanke’s way. Payrolls in November increased by 39,000 jobs, less than the most pessimistic forecast in a Bloomberg News survey of economists, and the unemployment rate rose to 9.8 percent from 9.6 percent.

The pace of economic growth is “insufficient to bring down unemployment,” the Federal Open Market Committee said this week as it affirmed its bond-buying plan and renewed a pledge for an “extended period” of low interest rates.

An increase in Treasury bond yields has provided fodder to critics such as Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut.

‘Dismal Failure’

“Their effort to achieve the stated objective of pressing long-term yields lower has been a dismal failure,” Stanley said in a Dec. 14 report. The yield on the benchmark 10-year Treasury note has climbed to 3.36 percent from 2.64 percent on Aug. 27, according to data compiled by Bloomberg.

Kevin Hassett, director of economic-policy studies at the American Enterprise Institute in Washington and a former Fed economist, said the central bank can’t take sole credit for the stock rally, which he said was caused by “a slew of slightly better economic data.”

Hassett, one of 23 mainly Republican academics and former policy makers who signed a letter last month to Bernanke telling him to arrest his expansion of monetary stimulus because it will cause a surge in inflation, also questioned whether stock gains will spur consumer spending through the so-called wealth effect.

While consumers’ stock investments have gained in value, “their bonds are going down,” said Hassett, who is also a columnist for Bloomberg News.

Too Early to Judge

Former Fed Governor Lyle Gramley said it’s “too early to make any definitive judgment” on the Fed’s bond purchases.

“I don’t know how you parse out the effects of QE2 given the changes in the environment,” including the sovereign-debt crisis in Europe and prospects for an extension of tax cuts in the U.S., said Gramley, senior adviser at Potomac Research Group in Washington.

Others say the rise in bond yields is a positive signal that reflects the outlook for faster economic growth and rising inflation expectations.

Fed asset purchases are keeping yields lower than they otherwise would be, Citigroup Inc. analysts led by Robert DiClemente said in a Dec. 10 report. At 3.36 percent, the yield on the 10-year Treasury note is below its 10-year average of about 4.16 percent, Bloomberg data show.

‘Bad Mistake’

“Looking only at the long-term rate is a bad mistake on those interpreting this policy” because quantitative easing works by increasing liquidity, University of Pennsylvania’s Siegel said.

Siegel pointed to the rise in commodity prices as another sign of increased confidence in the economy. Oil futures increased 17 percent since Aug. 27 to settle at $87.70 yesterday on the New York Mercantile Exchange.

“What the Fed is trying to do is reflate the economy,” said Ward McCarthy, chief financial economist at Jefferies & Co. in New York. “To the extent it has prevented expectations of outright deflation and encouraged an increase in the stock market, then it’s been a success.”

To contact the reporter on this story: Caroline Salas in New York at csalas1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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Gold Climbs After IMF Says Sales of Reserves Conclude; Platinum Advances

Gold gained after the International Monetary Fund said that it had finished a program of sales of the metal to boost its finances, removing a source of supply from the global market. Platinum prices also rose.

Immediate-delivery gold advanced as much as 0.4 percent to $1,391.02 an ounce and traded at $1,389.25 at 2:53 p.m. in Singapore. The IMF concluded sales of about 403.3 metric tons, or 13 percent of its reserves, to central banks and other market participants, it said yesterday in a statement, without disclosing the total amount raised.

“The last of the overhang has now gone,” Peter Richardson, chief metals economist at Morgan Stanley in Melbourne, said by phone today. “The market will take that as a positive development,” said Richardson.

More than half of the IMF gold was acquired by the central banks of India, Sri Lanka, Mauritius and Bangladesh, according to past announcements. The disposal plan was announced in September 2009.

Gold has climbed 27 percent this year, gaining to a record $1,431.25 an ounce this month, and is poised to rise for a 10th consecutive year. Purchases by central banks as part of their efforts to diversify their reserves away from currencies have contributed to the metal’s advance.

The contract for February delivery on the Comex in New York was little changed at $1,390.10 an ounce.

‘In the Wings’

“It’s not clear whether there are new sellers waiting in the wings,” said Morgan Stanley’s Richardson. “The official sector is likely to be net buyers,” he said, referring to central banks.

Gold assets held in exchange-traded products fell about 1 ton to 2,113.7 tons as of Dec. 21 from a record the day before, according to data collected by Bloomberg from 10 providers. Holdings have climbed more than 17 percent this year.

U.S. gross domestic product may have expanded 2.8 percent in the third quarter on an annualized basis, according to the median of a 71-analyst survey by Bloomberg News. That would be more than a previously calculated 2.5 percent gain for the period. The Commerce Department will publish the data today.

“We could see some of today’s gold rally cut by a strong U.S. GDP,” Jeremy Friesen, an analyst at Societe Generale SA in Hong Kong, said today in an e-mail. “But I think global uncertainty on the fiscal, monetary and geopolitical front will remain supportive for gold well into 2011.”

The Dollar Index, which gauges the currency’s movement against six major counterparts, dropped as much as 0.3 percent today, declining for the first day in four. Precious metals usually move inversely to the dollar.

Immediate-delivery silver was little changed at $29.3312 an ounce. The metal, which has gained 74 percent this year, is likely to gain more than gold in 2011 as industrial demand strengthens, Credit Agricole SA said in a report yesterday.

Platinum rose 0.3 percent to $1,728.10 an ounce and palladium was little changed at $753.70 an ounce.

-- With assistance from Sandrine Rastello in Washington. Editor: Jake Lloyd-Smith

To contact the reporter on this story: Chanyaporn Chanjaroen in Singapore at cchanjaroen@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@Bloomberg.net

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