Gold advanced after China’s Premier Li Keqiang said the government was giving top priority to development, signaling that the country’s debt surge may be set to continue.
Bullion for immediate delivery rose as much as 0.8 percent to $1,268.77 an ounce and traded at $1,259.89 by 12 p.m. in Singapore, according to Bloomberg generic pricing. The metal climbed more than 20 percent from a December closing low last week, the common definition of a bull market, as investors flocked to a haven amid market turmoil and global growth uncertainty.
Development in China is of primary importance and the key to solving every problem the country faces, Li said in a work report delivered Saturday at the start of the National People’s Congress in Beijing. Accelerated stimulus may push debt to 258 percent of gross domestic product this year from 247 percent at the end of 2015, Bloomberg Intelligence economists Tom Orlik and Fielding Chen wrote in a note. Targets outlined in the report include higher retail sales and a bigger budget deficit.
“Gold is supported by China’s retail growth target, easing, and fiscal deficit expansion,” Helen Lau, an analyst at Argonaut Securities (Asia) Ltd. in Hong Kong, said in an e-mail. “The former will continue to underpin gold consumer demand, and the latter will boost investment sentiment.”
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- The European Central Bank is expected to deliver a package of easing measures at a March 10 meeting.
- A gauge of the greenback dropped to a four-month low Friday after a U.S. report showed average hourly earnings posted the first monthly decline in more than a year, even as employers added more workers.
- Investors boosted holdings in gold-backed exchange-traded funds by 262.3 metric tons this quarter, the biggest amount since the three months ended June 2010.
- Spot silver was up 0.3 percent, palladium fell 0.3 percent and platinum lost 0.2 percent.
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