Gold Diverges From Silver and Platinum

It was a positive start to the week for stocks in Europe, although the German DAX pared gains following disappointing economic data from the country. U.S. stocks fell on Monday, with investors adopting a cautious approach two days before the release of minutes from the Federal Reserve’s last meeting and quarterly earnings. Equities in Asia were mixed on Tuesday as investors awaited central bank decision in Japan after the Reserve Bank of Australia left rates on hold. Gold retreated after climbing the most in two months as the dollar advanced toward a four-year high, reducing demand for an alternative investment. Platinum extended its rebound from a five-year low and palladium rallied.  Gold dipped $2.40 to trade at $1204.90 as the US dollar recovered to trade at 86.16 after touching a record high at the close on Friday. Silver is trading on a better note at 17.283 recovering on Monday and Tuesday gaining 58 points in the Asian session. Palladium followed suit adding $5.10 to trade at $772.50. Platinum futures for January delivery gained 1.8 percent to $1,249.20 an ounce, the biggest gain since July 1. Earlier, the price touched $1,186.50, the lowest since July 31, 2009, amid concern that demand is dwindling from Europe to China. The price has dropped 10 percent in the past 12 months.

The dollar weakened the most in more than 12 months, dropping from a four-year high, as uneven U.S. labor-market data refueled the debate over when the Federal Reserve will raise interest rates. Goldman Sachs Group Inc. says investors shouldn’t rush to anticipate a rate increase from the Federal Reserve after jobs gains beat economist forecasts. BlackRock Inc. said it’ll happen sooner than expected. From December 2008 to June 2011, gold jumped 70 percent as the Fed bought debt and held borrowing costs at an all-time low to bolster the economy. Policy makers are considering the timing for the first rate increases since 2006 amid signs the economy is recovering.

China, the world’s largest consumer of gold, ends a week-long national holiday on Oct. 8.

Copper added 4 points to trade at 3.041 after falling last week below the $3 level. Copper capped the biggest gain in almost three weeks on speculation that demand will improve amid signs of a strengthening economy in the U.S., the world’s second-biggest consumer of the metal. There’s a bit of stabilization today, but investors don’t think it necessarily marks a turning point back up. Copper has been hit by a combination of weaker growth in Europe and China, a positive dollar and prospects for a surge of supply. Market participants will be watching the backwardation in the London Metal Exchange forward curve closely next week for signs that the dominant holder of stocks and nearby positions is giving up its grip.