Gold Gains as Physical Asian Demand Offsets Sales After Rally

Gold climbed for a fifth day, set for the longest rally in more than two months, as demand increased in Asia ahead of the Lunar New Year, offsetting sales prompted by the metal’s climb to a two-week high. Cash gold rose as much as 0.8 percent to $1,623.97 an ounce, the highest since Dec. 21, by 3:10 p.m. in Singapore. The metal rose 4.9 percent in the four trading sessions from Dec. 30 as tension between Europe and Iran increased over its nuclear program. February-delivery bullion advanced as much as 0.8 percent to $1,625 on the Comex. Spot silver gained as much as 1.4 percent to $29.58 an ounce, immediate-delivery platinum climbed as much as 1 percent to $1,433.13 an ounce and cash palladium rose as much as 1.5 percent to $658 an ounce.

“Buying is expected to pick up more as we come closer to the Chinese New Year,” said Dick Poon, precious-metals trading manager at Heraeus Ltd. “There may be some people who prefer to hold cash and they sell when the prices goes up.” China, the second-largest gold-jewelry market, may boost consumption by 35 percent in 2012 to a record, according to Frost & Sullivan, as the tradition of giving gold for weddings, birthdays and holidays, including the upcoming Lunar New Year, drives demand. The weeklong new-year break starts Jan. 23. “This year is the Year of the Dragon, and you’re going to see not just China is a big consumer, you’ll see Taiwan, Hong Kong, Vietnam, Thailand,” Frank Holmes, chief executive officer of U.S. Global Investors Inc., said in a Bloomberg Television interview. “All these areas will be buying gold for gift-giving because there’s an emotional attachment to the dragon as being the entrepreneurial spirit of life and it’s auspicious.”

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