Gold Rises After Stock Sell Off Spurs Metal Demand

Gold rose in New York as stocks fell around the world, boosting demand for an alternative investment.

The MSCI All Country World Index dropped 0.2 percent as Hong Kong’s Hang Sang Index erased gains for the year. Gold climbed 1.8 percent this year, lagging gains in the Bloomberg Dollar Spot Index and the MSCI global stocks index.

“What happens with equity markets and geopolitical tensions may drive day-to-day sentiment,” said Sun Yonggang, a macroeconomic strategist at Everbright Futures Co. in Shanghai. “The dollar remains the driver of gold direction.”

Gold for December delivery rose 0.7 percent to $1,223.70 an ounce by 7:57 a.m. on the Comex in New York. The metal has declined 5 percent this month and 7.4 percent in the third quarter, the first loss this year.

A report today may show U.S. personal spending expanded in August after data last week showed the world’s largest economy grew the most since 2011 in the second quarter. Consumer spending accounts for about 70 percent of gross domestic product.

Holdings in the SPDR Gold Trust, the biggest gold-backed exchange-traded product, contracted 0.1 percent on Sept. 26 to 772.25 metric tons, the least since December 2008.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza