Johannesburg - Gold was little changed after falling last week, while platinum and palladium declined.
Bullion for immediate delivery rose 0.1 percent to $1 090.37 an ounce as of 12:15 p.m. in London, according to Bloomberg generic pricing. The metal slid 1.4 percent last week.
The past decline in prices in addition to falling grades will prevent new mining projects from going ahead, according to Carole Ferguson, an analyst at SP Angel Corporate Finance.
There is a strong likelihood that prices “will move up gently from here” due to a tapering off in supplies, Ferguson said by phone from London. “That might just coincide with the interest in gold as a risk hedge.”
Gold investors have grappled with fluctuations in global equities this year, driven by weakness in China and sinking crude prices. Monday’s gains in gold came even after Chinese stocks rebounded from a selloff in equities last week and oil pared some of its losses.
Investors added to gold holdings in exchange-traded products for the sixth time in seven days. Assets rose 4.4 metric tons to 1 489.1 tons as of Friday, the highest level since the start of December, data compiled by Bloomberg show. Speculative investors’ eradicated their net short positions in gold in the week through January 12 for the first time since November, Carsten Fritsch and Michaela Kuhl, analysts at Commerzbank, said in an e-mailed note.
“Almost record-high net short positions were completely eradicated in the space of just two weeks,” Fritsch and Kuhl said.
Gold stocks extended gains, with the five-member FTSE/JSE Africa Gold Mining Index rising 1.8 percent to lift a rally since the beginning of the year to 33 percent. Newcrest Mining gained 0.9 percent at the close of trade in Sydney.
Silver was little changed, while platinum fell as much as 1 percent to deepen a selloff to the lowest prices since 2008. Palladium dropped 1 percent.
BLOOMBERG