Gold climbed for the first time in three days as concern that China’s recovery may be faltering boosted haven buying, with cash-market volumes holding above last year’s average level. Palladium snapped a four-day rally.
Spot gold gained as much as 0.3 percent to $1,583.58 an ounce, and traded at $1,582.75 at 3:22 p.m. in Singapore, after dropping to a two-week low of $1,561.55 on March 8. Palladium sank as much as 1.6 percent to $770.55 an ounce after rallying 9.2 percent in the four days to March 8, when it touched $786, the most expensive since September 2011.
Industrial output in China had the weakest start to a year since 2009, while lending and retail-sales growth slowed, according to reports at the weekend. Volumes on China’s biggest cash bullion market have surged in the past three weeks.
“Demand in China appears to be strong,” said Wang Xiaoli, chief investment strategist at CITICS Futures Co., a unit of China’s biggest listed brokerage. “Palladium’s rise was driven by expectations of robust auto sales in China, so the recent economic data has made some people cautious.”
Spot gold has lost 5.5 percent this year as data from the U.S. showed that country’s rebound gaining traction, boosting the U.S. currency. Reports last week showed that companies hired more workers than expected and unemployment declined last month. Federal Reserve policy makers remain divided on the pace of stimulus that helped gold to rally for the past 12 years.
Cash bullion of 99.99 percent purity added 0.2 percent to 319.03 yuan a gram ($1,595.62 an ounce) on the Shanghai Gold Exchange. Daily volumes for the benchmark cash contract have been more than double the average in 2012 since Feb. 18, when it reached a record 22,024 kilograms, according to exchange data.
Gold for April delivery rose as much as 0.4 percent to $1,582.50 an ounce on the Comex in New York and was at $1,581.50. Assets in exchange-traded products holdings dropped to 2,484.12 metric tons on March 8, the lowest level since September.
Spot silver increased 0.3 percent to $29.08 an ounce, reversing a 0.3 percent decline, while platinum slipped 0.2 percent to $1,601.30 an ounce. Palladium, used in exhaust- cleansing systems, was last at $771.70 an ounce.