Gold was little changed above a two-month low in New York as investors weighed signs of increased physical demand against gains in the dollar and equities.
The metal dropped to $1,273.40 an ounce on Aug. 21, the lowest since June 18, on speculation the Federal Reserve will raise borrowing costs sooner than expected. In China, the world’s largest gold buyer, volumes for the benchmark spot contract on the Shanghai Gold Exchange rose to a four-week high today, the latest data show.
Gold futures rose as much as 1 percent yesterday, even as the dollar strengthened amid expectations for higher U.S. interest rates and global equities gained. Fighting in eastern Ukraine persisted even as Russian President Vladimir Putin said talks with his Ukrainian counterpart over a separatist conflict that’s killed more than 2,000 people were “positive” as the parties began discussions on a political resolution.
“There’s been some scattered bargain hunting by physical buyers,” Bernard Sin, the head of currency and metal trading at MKS (Switzerland) SA, a Geneva-based refiner, said today by phone. While geopolitical tension is helping prices, advances in the dollar and equities are limiting gains for gold, he said.
Gold for December delivery was little changed at $1,285.70 by 7:41 a.m. on the Comex in New York. Bullion for immediate delivery added 0.3 percent to $1,284.99 in London, according to Bloomberg generic pricing.