Gold trades near record after Indian buy

“It's positive in many ways because it suggests central banks rather than being net sellers are now looking at becoming net buyers,” said James Moore, an analyst at TheBullionDesk.com in London.

December-delivery gold climbed as much as US$12.90, or 1.2 percent, to US$1,066.90 an ounce on the New York Mercantile Exchange's Comex division. The record was US$1,072 an ounce on Oct. 14. Gold for immediate delivery in London slipped 0.1 percent to US$1,058.02 an ounce by 9:58 a.m. local time, compared with a record of US$1,070.80. Prices rose to an all-time high in gold traded in Indian rupees.

India's purchase buoyed gold as industrial metals slumped on concern that governments will removal economic-stimulus measures, crimping demand for raw materials. Copper led declines on the London Metal Exchange, falling 2.3 percent to US$6,405 a ton.

India held 350 tons of gold at the end of 2008, making it the 12th-largest government owner, according to the GFMS Ltd. 2009 Gold Survey. The extra 200 tons propels India past Russia into ninth place, according to GFMS figures. India is the largest buyer of gold for jewelry and investment.

“You usually associate Indian consumers buying gold more than you do the central bank in India,” said Mario Innecco, a broker at MF Global Ltd. in London. Gold fell 0.8 percent over the two weeks from Oct. 19 to 30 for the IMF gold sale. Prices may rise to US$1,125 an ounce by the end of the year, he said.

The IMF's executive board on Sept. 18 approved sales of 403.3 tons, pledging to avoid disrupting the market.

The board last year endorsed the sale, about one-eighth of the organization's total stockpile, as part of a plan to shore up its finances. China increased its gold reserves by 76 percent since 2003 to 1,054 tons, the official Xinhua News reported in April.

China, Russia and Brazil may be interested in the rest of the IMF gold for sale, Moore said.

Among other precious metals, silver dropped 0.2 percent to US$16.42 an ounce, platinum advanced 0.3 percent to US$1,340.25 an ounce and palladium gained 0.6 percent to US$325.25 an ounce.

Gold has gained 21 percent this year, as the Dollar Index, which tracks the greenback's performance against six major currencies, slumped 6.3 percent. The dollar rose 0.6 percent against the euro Tuesday.

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