Gold headed for the biggest weekly advance since August as U.S. economic data that trailed estimates increased haven demand, with holdings in the biggest exchange-traded product expanding to an almost two-month high. Silver was set for the longest rally since March 2008.
While the prospect of a reduction in asset purchases by the Federal Reserve helped spur a 28 percent slump in gold in 2013, the cuts to stimulus that began in January hurt emerging-market stocks and currencies and increased gold’s appeal as a haven.
Bullion advanced 9.5 percent this year on concern that U.S. growth may be stalling and as the MSCI All-Country World Index of equities retreated 1.3 percent.
“Gold got seriously hammered last year, and with the stock markets not performing as well as expected, some investors are reconsidering their allocation to gold,” Wallace Ng, a Shanghai-based trader at Gemsha Metals Co., said in an interview. “Physical demand this week has been good.”
Gold futures for April delivery rose 1.3 percent to $1,316.90 an ounce at 7:14 a.m. on the Comex in New York on Friday.
Prices headed for a 4.3 percent weekly gain, the biggest such increase since the week ended Aug. 16. In London , gold for immediate delivery climbed 1.1 percent to $1,317.15 an ounce after touching $1,319.75, the highest price sinceNov. 7.
Gold has traded above the 100-day moving average since Feb. 10, and is heading for a close above the 200-day moving average for the first time since February 2013.
U.S. retail sales fell in January by the most since June 2012, while jobless claims unexpectedly climbed last week, data last week showed. Stimulus will be cut in measured steps, Fed Chair Janet Yellen said on Feb. 11, while reiterating that the purchases aren’t on a preset course.
Gold’s rally has been driven in part by “very, very strong” physical demand, Greh Robinson , chief executive officer of Newcrest Mining Ltd., Australia’s biggest producer, said on a media call. His counterpart at largest gold miner Barrick Gold Corp., Jamie Sokalsky, said he is more optimistic prices have bottomed amid reports of Chinese demand and slowing ETP sales.
