Gold bars and granules. File photo: Reuters

London - Gold rose for the first time in three days in London on speculation prices that reached a seven-week low will encourage more physical purchases from China.

Bullion of 99.99 percent purity for immediate delivery in Shanghai traded at a premium to the London price earlier today, data compiled by Bloomberg show.

China was last year’s biggest gold consumer, according to the London-based World Gold Council.

Gold slipped 3.2 percent in March, partly on the outlook for reduced stimulus in the US.

Federal Reserve Chair Janet Yellen said last month the central bank may end its bond-buying program this fall and increase borrowing costs six months after that, before this week saying that “considerable slack” in labor markets showed that accommodative policies will be needed for “some time.”

US reports this week may show stronger jobs growth after data yesterday showed that manufacturing accelerated last month.

“The downside in gold seems to be protected by a modest pickup in demand from China,” Abhishek Chinchalkar, an analyst at Mumbai-based AnandRathi Commodities Ltd., said in a report.

“However, the metal continues to hover close to its lowest of the past seven weeks, pressurised by further deterioration in safe-haven buying.”

Bullion for immediate delivery rose 0.3 percent to $1,283.29 an ounce by 9:34 a.m. in London, according to Bloomberg generic pricing. It reached $1,277.79 yesterday, the lowest since February 11.

Gold for June delivery added 0.3 percent to $1,283.30 on the Comex in New York, after falling for a fifth session yesterday in the longest run of losses since November.


Futures Trading


Futures trading volume was 22 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed.

The metal’s 14-day relative-strength index fell to about 35.2 in London yesterday, the lowest since December, and near the level of 30 that suggests a potential impending rebound to some analysts who study technical charts.

It was at 37.4 today.

“There is some buying interest below $1,300, but the upward momentum is weak,” Xia Yingying, an analyst at Nanhua Futures Co., said from Hangzhou.

“Prices are likely to stay in range before the US jobs data and very short-term support can be found at the 100-day moving average” that’s currently at about $1,272.24, she said.

Economists forecast the Labor Department will say on April 4 US employers added 200,000 jobs in March after boosting positions by 175,000 the previous month.

Silver for immediate delivery rose 0.5 percent to $19.8701 an ounce in London.

Platinum added 0.3 percent to $1,428.75 an ounce.

Palladium lost 0.3 percent to $778.47 an ounce.

Prices climbed to $801.53 on March 24, the highest since August 2011.

More than 70,000 members of the Association of Mineworkers and Construction Union have been on strike at South African mines of the biggest platinum producers since January 23.

The AMCU said it will march to Lonmin Plc’s Johannesburg offices tomorrow. - Bloomberg News