Gold prices rebounded after a slump triggered a trading halt in New York, while slowing growth for U.S. services increased demand for an alternative asset.
Futures for February delivery fell as much as 2.1 percent in trading of more than 8,000 contracts each for 100 ounces on the Comex, according to data compiled by Bloomberg.
CME Group Inc, which owns the exchange, halted trading for 10 seconds at 10:14 a.m. as prices dropped more than $30 an ounce in about one minute. The slide triggered the exchange’s “velocity logic event,” and all trades during the slump stand, Chris Grams, a CME spokesman, said in an e-mail. Prices traded 0.2 percent higher at 12:07 p.m.
“These kinds of price movements are becoming very common, and it seems some players are putting in very large orders to trigger this kind of slump,” Bill O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. “The exchange needs to look into these kind of spikes.”
Gold futures for February delivery gained $2.30 to $1,240.60 on the Comex in New York. Prices gained 2 percent last week on increasing demand for the metal in bars and coins.
The premium for immediate delivery gold in China was about $22.35 an ounce, compared with last month’s average of $15.35. A services-industry gauge in the nation decreased to 50.9 in December from 52.5 in the previous month, according to HSBC Holdings Plc and Markit Economics Ltd.
The U.S. Institute for Supply Management’s non- manufacturing index decreased to a six-month low of 53 in December from 53.9 in the prior month, a report from the Tempe, Arizona-based group showed.
Haven Buying
“Physical buying has remained robust in Asia,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates, said in a telephone interview from Chicago. “Also, there is some safe-haven buying because of growth concerns.”
Bullion slid 28 percent last year, the most since 1981, as investors lost faith in the metal as a store of value. The Federal Reserve on Dec. 18 said it would reduce its monthly bond buying to $75 billion from $85 billion.
Holdings in gold-backed exchange-traded products fell 3.3 metric tons on Jan. 3 to 1,755.6 tons, the lowest since October 2009, data compiled by Bloomberg show.
Silver futures for March delivery gained 0.1 percent to $20.225 an ounce on the Comex.
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