Gold Steadies Around 1267 as Sharp Drop Spurs Buying

Gold advanced for the first time in four days on speculation that prices near the lowest level since June will encourage purchases as investors assessed the strength of the U.S. economy and the outlook for borrowing costs.

Bullion for immediate delivery rose as much as 0.2 percent to $1,268.01 an ounce before trading at $1,266.48 by 11:25 a.m. in Singapore, according to Bloomberg generic pricing. The 14-day relative strength index fell to a three-month low of 33.6 yesterday. Readings below 30 signal to some traders who study technical charts that prices may rebound.

Prices dropped to $1,262.60 yesterday, the lowest since June 17, as a U.S. manufacturing gauge climbed to the highest since March 2011, spurring gains in the dollar. The Bloomberg Dollar Spot Index was little changed near a seven-month high today. Data on Sept. 5 may show that U.S. payrolls climbed by more than 200,000 in August for a seventh straight month.

Bloomberg

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