Gold extended a rebound from a 34-month low, gaining for a third day, on speculation that lower prices will raise demand even as holdings in the largest bullion-backed exchange-traded product resumed a decline.
Spot bullion rose as much as 0.7 percent to $1,260.90 an ounce and was at $1,259.49 at 2:59 p.m. in Singapore. Prices fell to $1,180.50 on June 28, the lowest since August 2010, before rising 2.8 percent that day and 1.5 percent yesterday. Benchmark contract volumes on the Shanghai Gold Exchange in the past week were more than three times last year’s daily average.
Gold plunged 23 percent in the second quarter as investors speculated that the U.S. Federal Reserve will scale back monetary stimulus. Newsletter writer Dennis Gartman said yesterday that he’s very bullish on gold after the slump as central banks continue to inject money. There’s strong physical demand with bullion below $1,600 an ounce, according to Standard Bank Plc’s SBG Securities (Pty) Ltd. unit.
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