Metals Mixed With Gold Near Highs And Copper Near Lows

Gold is trading at 1332.50 coming off its recent high at 1340.00 touched earlier in the week as traders looked for safety as the Ukraine-Russian situation escalated after President Putin put the military on the borders on high alert. Yesterday, Federal Reserve chair Janet Yellen said she isn’t sure how much of the recent deterioration in US economic growth is due to weather, adding the central bank might consider a pause in its reduction of bond buying if the weakness persists.

“Asset purchases are not on a preset course, so if there’s a significant change in the outlook certainly we would be open to reconsidering, but I wouldn’t want to jump to conclusions here,” Ms. Yellen told the Senate Banking Committee Thursday.

Gold was little changed on Friday but was on track for its biggest monthly gain since July after investors and speculators chased prices higher on concern about the pace of the US economy and unrest in Ukraine. However, recent gains may be hard to sustain in the absence of strong physical buying.  Spot gold was nearly flat at $1,330.86 an ounce down from a four-month high of $1,345.35 struck on Wednesday. Gold has gained 7% in February, its biggest monthly rise since the 7.2% added in July.

“Sentiment in the market is neutral from here. Resistance is at $1,350, while on the downside, $1,300 should be the support,” Mr Fung said. Premiums for gold bars in Hong Kong dipped to $1 an ounce to the spot London prices from as high as $1.70 last week, which reflected a slowdown in demand from China.

Silver took its cues from gold to trade at 21.288 down by 64 points.  Lately, investor appetite for gold is clearly on the rise, as the SPDR Gold Trust, the biggest gold exchange-trade fund of its kind, is set for its first monthly inflow since December 2012, according to a Reuters report on Thursday. The ETF has added 10.5 tons to its reserves so far in February.

Elsewhere in metals trading, platinum shed $30 to $1,450.40 an ounce, while palladium lost 45 cents to $743.40 an ounce. High-grade copper edged lower to $3.19 a pound. Copper traded near the lowest in more than two months on concern China’s slowing growth and a weaker yuan may reduce demand for the metal in the biggest user. An official report due tomorrow may show China’s manufacturing expanded this month at the slowest pace since June, with a private gauge next week projected to show slowdown. China’s yuan headed for the worst month in two decades on speculation the government will broaden the currency’s trading band after allowing more volatility at a time when growth is slowing in the world’s second-biggest economy.