Gold headed for the biggest weekly advance since August as U.S. economic data that trailed estimates increased haven demand, with holdings in the biggest exchange-traded product expanding to an almost two-month high. Silver was set for the longest rally since March 2008.
While the prospect of a reduction in asset purchases by the Federal Reserve helped spur a 28 percent slump in gold in 2013, the cuts to stimulus that began in January hurt emerging-market stocks and currencies and increased gold’s appeal as a haven. Bullion advanced 9.5 percent this year on concern that U.S. growth may be stalling and as the MSCI All-Country World Index of equities retreated 1.3 percent.
“Gold got seriously hammered last year, and with the stock markets not performing as well as expected, some investors are reconsidering their allocation to gold,” Wallace Ng, a Shanghai-based trader at Gemsha Metals Co., said in an interview. “Physical demand this week has been good.”
