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Gold Gains in New York as Central Banks Boost Bullion Reserves - report

Gold rose for the first time in four days in New York on expectations central banks will continue buying bullion after data showed Brazil boosted its reserves for a third month, Kitco News reported.

It noted Brazilian holdings expanded the most in 12 years, rising 14.7 metric tons in November, data from the International Monetary Fund showed. The nation's holdings doubled since August. Central banks have bought 426.5 tons of gold so far this year, UBS AG said in a report today. Bullion is 5.3% higher this year, set for a 12th annual gain.

Gold for February delivery advanced 0.2% to US$1,648.40 an ounce by 6.57 a.m. on the Comex in New York. Gold for immediate delivery was little-changed at $1,647.80.

Futures declined to the lowest price since Aug. 21 yesterday, after data showed the U.S. economy grew at a 3.1% annual rate last quarter, exceeding all projections in a Bloomberg survey. Bullion is 2.7% lower this week, the most since the period to June 22, set for a fourth weekly drop.

"Gold is likely to get caught between the crosscurrents of improvements in the outlook on the U.S. and the global economy and prolonged period of accommodative monetary policies," UBS said in the report. Bullion's drop below its 200-day moving average accelerated the sell-off yesterday, according to the report.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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