Gold Rises as Low Prices Spurred Buyers

Gold rose in New York on speculation a drop to a three-month low will spur more purchases. Platinum traded near the lowest price since February.

Bullion retreated 7 percent from an almost four-month high set July 10, when geopolitical tensions helped spur demand for a haven. The decline took the metal toward a technical level that suggests to some traders that the price may rise. Ukrainian President Petro Poroshenko said Russia has withdrawn more than two-thirds of its troops from his country as European Union governments meet to consider imposing tougher Russian sanctions.

The dollar reached a 14-month high today against a basket of 10 major currencies. Economists surveyed by Bloomberg expect data this week to show jobless claims fell and retail sales improved, adding to the case for the Federal Reserve to raise interest rates next year.

“Market participants continued reducing their bullish bets in the metal on the strengthening dollar,” Abhishek Chinchalkar, an analyst at Mumbai-based AnandRathi Commodities Ltd., said in a report today. “With prices at a three-month low, buyers of the physical yellow metal could step in at these levels.”

Gold for December delivery rose 0.4 percent to $1,253 an ounce by 7:27 a.m. on the Comex in New York. It fell to $1,248.10 yesterday, the lowest since June 6. Bullion for immediate delivery lost 0.2 percent to $1,252.54 in London, according to Bloomberg generic pricing.

Futures trading volume was about the average for the past 100 days for this time of day, data compiled by Bloomberg show.

via Bloomberg

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