Gold Rises as Silver Caps Biggest Weekly Gain Since 2008

Gold rose to the highest in almost two months and silver capped the biggest weekly rally since 2008 on signs of higher physical demand for precious metals.

Global bar and coin purchases reached a record last quarter and jewelry usage rose to the most since 2008, World Gold Council figures showed this week. Holdings in exchange-traded products backed by silver reached an all-time high on 15 August.

Purchases for gold and silver are climbing as lower prices attract consumers after both metals fell into bear markets in April. Gold has rebounded 16 percent since reaching the cheapest in 34 months in June, while silver entered a bull market, settling 24 percent above its bear-market low. Sales of American Eagle silver coins by the U.S. Mint were 31 million ounces so far this year, compared with 33.7 million ounces sold in all of 2012, data on the website show.

Gold futures for December delivery added 0.7 percent to settle at $1,371 an ounce on the Comex in New York. Prices reached $1,379.20 after the close of regular trading, the highest since June 18. The precious metal gained 4.5 percent this week, the most since July 12.

JPMorgan Outlook

Demand in India and labor concerns in South Africa may boost prices in the next four to five weeks before an industry conference in Denver, JPMorgan Chase & Co. said in a report dated on 15 August.

Futures have fallen 18 percent this year as some investors lost faith in the metal as a store of value. Holdings in gold ETPs are down 26 percent hits year, wiping $55.5 billion from the value of the assets. Last quarter, billionaire John Paulson cut his stake in the SPDR Gold Trust, the biggest-bullion ETP, by 53 percent, a government filing showed this week.

Silver futures for December delivery climbed 1.7 percent to $23.372 an ounce in New York, capping a gain of 15 percent this week, the most since September 2008. Prices touched $23.445 after the settlement, the highest since May 15.

On the New York Mercantile Exchange, platinum futures for October delivery fell 0.3 percent to $1,527.60 an ounce. The price has dropped 1 percent this year.

Palladium futures for September delivery rose 0.8 percent to $763.05 an ounce, extending the year’s gain to 8.5 percent.