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By Bloomberg

Gold advanced as prices near the lowest level in three weeks encouraged purchases. Silver jumped the most in a week and palladium rose to the highest since Dec. 12.

Gold for immediate delivery added as much as 1 percent to $1,186.10 an ounce and traded at $1,184.01 by 1:30 p.m. in Singapore, according to Bloomberg generic pricing. The metal dropped to $1,170.76 on Dec. 22, the lowest since Dec. 1.

While bullion gained today, it’s heading for a second weekly decline, the longest such streak since October, as prospects for higher U.S. borrowing costs, accelerating economic growth and a plunge in oil prices cut demand for a haven. Holdings in the biggest exchange-traded product backed by the metal were unchanged after falling the most in 18 months on Dec. 23. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 currencies, is near a five-year high.

“People earlier were shorting. It’s towards the year-end, so there’s some profit-taking,” Raymond Mok, head of foreign exchange and bullion development at Sucden Financial Ltd.’s Hong Kong unit, said today, referring to investors buying back bearish bets. “The U.S. economy is well on track, and that forces the Fed to rethink a possible timeline on when they’ll start raising interest rates,” he said of the Federal Reserve.

The U.S. economy expanded at a 5 percent annual rate in the third quarter, the biggest advance since 2003, data this week showed. Jobless claims dropped to the lowest level in seven weeks, according to a Labor Department report on Dec. 24.

Gold Outlook

Palladium, the best performing precious metal, is poised to climb 14 percent in 2014, rising for a third year. Platinum sank 12 percent and is heading for a second year of losses, while silver tumbled 18 percent. Gold dropped 1.4 percent and is on course for its second straight annual decline, the longest such run since 2000.

Bullion, which in November fell to the lowest level since 2010, doesn’t have much further to fall next year as doubts about the global economic recovery boost the metal’s appeal as a store of value, said Sun Yonggang, a Shanghai-based macroeconomic strategist at Everbright Futures Co.

“Gold is near the bottom and there’s some buying support at $1,180,” Sun said by phone today. “The increase in gold prices today isn’t that large. It’s typical after Christmas.”

The metal will climb to $1,280 by the end of 2015, rising each quarter, as demand in China and India improves, Australia & New Zealand Banking Group Ltd. said Dec. 17. Bullion will probably advance in 2015 once the market prices in the Fed’s first few monetary-tightening steps, TD Securities said in a report dated Dec. 8.

Investor Holdings

Assets in the SPDR Gold Trust were unchanged at 712.9 metric tons on Dec. 24 after slumping 1.6 percent, the most since June 2013, the previous day.

Gold for February delivery rose 0.9 percent to $1,183.80 an ounce on the Comex in New York. Aggregate trading was 13 percent below the 100-day average for this time, according to data compiled by Bloomberg.

Silver for immediate delivery rebounded as much as 2 percent to $16.0284 an ounce, the biggest intraday gain since Dec. 18, and traded at $15.9688. The metal was still set for the second week of losses.

Palladium climbed as much as 1.4 percent to $819.33 an ounce before trading at $813.45, as speculation grew that China will take more measures to bolster the economy. The metal is heading for a 0.9 percent increase this week. Platinum added 1.6 percent to $1,210.63 an ounce, the highest level in a week, before trading at $1,207.31.