Gold futures rose as a decline in U.S. equities reignited demand for an alternative asset. The Standard & Poor’s 500 Index of shares headed for the biggest losses since July. Gold has fallen 5.1 percent this month amid a rally to record for U.S. stocks. Bullion also rebounded today as the dollar pared gains.
The metal is moving closer to erasing its 2014 advance as the greenback climbs to a four-year high against 10 major currencies, cutting the appeal of alternative investments. Bullion is headed for its first quarterly loss this year amid bets that the U.S. recovery will prompt the Federal Reserve to boost interest rates before its peers.
“The stock market’s big drop is providing some temporary support to gold,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “Also, there could be some physical buying” after prices reached new lows, he said.