Gold futures headed for the longest rally in six weeks after the World Bank cut its forecast for global economic growth, boosting demand for the metal as a haven.
The Washington-based lender estimates the global economy will expand 2.8 percent this year, down from a January projection of 3.2 percent. The bank reduced outlooks for the U.S., China, Russia, India and Brazil. Gold rose to a six-month high in March as tension in Ukraine escalated and concern mounted that U.S. growth was stalling.
The precious metal slumped 28 percent last year, ending a 12-year rally, as equities surged and on expectations that the Federal Reserve would slow the pace of U.S. monetary stimulus as the economy improved. Last week, the European Central Bank became the first major central bank to take one of its main rates negative.
“There is some safe-haven buying,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview. “The World Bank lowering forecast for the U.S. is a matter of concern.”
Gold futures for August delivery rose 0.2 percent to $1,262.40 an ounce at 9:56 a.m. on the Comex in New York, heading for a third straight gain and the longest rally since April 25. Trading was 45 percent below the average for the past 100 days for this time, according to data compiled by Bloomberg.
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