Gold settled at its loftiest level since mid-April on Tuesday as bets that record-low interest rates will persist buoyed stocks. Expectations that interest rates will remain at record lows for some time yet and upbeat Chinese data lifted U.S., European and Asian stocks on Tuesday, traders said. Low interest rates tend to favor non-yielding bullion.
“Lower interest rates are for sure a supportive factor for gold, and if that idea spreads in the market, it might trigger investor invest there as well,” Heraeus trader Alexander Zumpfe said. “(I) could imagine that ETF buying we already saw over the last couple of days is (also) delivering some support.”
U.S. gold futures for August delivery ended the trading session $4.60 higher at $1,326.60 an ounce, its best settlement price since April 14. Spot gold, meanwhile, hit a three-month high at $1,332.10 an ounce, before easing to $1,327 an ounce.