Gold Set for Weekly Gain Amid Signs of Physical Demand, Recovery

                 Gold traded below its highest level this month and headed for a second weekly gain in New Yorkas investors weighed a pickup in physical demand against signs economies are improving.

The metal is heading for the first back-to-back weekly advance since January even as U.S. data showed this week retail sales jumped and jobless claims dropped. Global equities reached the highest since June 2008. Japan’s political parties confirmed Haruhiko Kuroda as the Bank of Japan (8301) governor as well as Kikuo Iwata and Hiroshi Nakaso as deputies, ushering in a leadership that may push for more monetary stimulus within weeks.

“Numbers out of the U.S. have been coming out better and that’s helping equities go higher,”Afshin Nabavi, a senior vice president at bullion refiner MKS (Switzerland) SA in Geneva, said today by phone. “Physical demand still remains strong, from the Far East mainly. There seems to be bargain hunting every time around the $1,570 an ounce area.”

Gold futures for April delivery added 0.1 percent to $1,591.70 an ounce by 7:48 a.m. on the Comex in New York. Prices climbed to this month’s high of $1,598.80 an ounce on March 13 and are up 0.9 percent this week. Gold for immediate delivery increased 0.2 percent at $1,593 inLondon.

Futures trading volume was 42 percent below the average in the past 100 days for this time of day. Bullion rallied the past 12 years as nations pledged more stimulus to support economic growth. The metal is down 5 percent this year on optimism global economies are strengthening.

Barclays Plc cut its 2013 gold forecast yesterday by 7.4 percent to $1,646, citing increasing downside risks to owning gold. While physical demand in India and China, the biggest consumers, responded to lower prices, exchange-traded product sales are the key risk, it said. Gold ETP holdings added 0.2 metric ton to 2,471.1 tons yesterday, the first increase since Feb. 7, data compiled by Bloomberg show. They’re down 161.4 tons from the December record.

Silver for May delivery rose 0.3 percent to $28.89 an ounce. Palladium for June delivery was up 0.4 percent at $774 an ounce. Platinum for April delivery increased 0.4 percent to $1,595.70 an ounce. - Bloomberg.com