Gold rose near the highest price in almost four weeks in New York as concern that economic growth is slowing spurred demand for a haven.
Gold advanced this month and the dollar and global equities weakened as Federal Reserve officials indicated a worldwide economic slowdown may delay U.S. interest-rate increases. Crude oil traded in New York fell for the fifth time in six days. Some investors judge that lower oil prices can curb inflation, reducing the appeal of gold as hedge.
Bullion erased this year’s gains earlier this month as signs of an improving U.S. economy added to the case for higher borrowing costs. Rising interest rates reduce gold’s allure because the metal generally only offers investors returns through price gains, while a stronger dollar typically cuts demand for a store of value.
“With uncertainty about the timing of the Fed’s rate hike now starting to show, we feel that equities and the dollar would continue on the defensive, which would then underpin gold,” Abhishek Chinchalkar, an analyst at Mumbai-based AnandRathi Commodities Ltd., said in a report today. “Gains could be capped around $1,250 an ounce if crude continues under pressure.”
Gold for December delivery added 0.5 percent to $1,236.10 an ounce by 7:36 a.m. on the Comex in New York. It reached $1,238 yesterday, the highest since Sept. 17. Gold for immediate delivery was little changed at $1,235.81 in London, according to Bloomberg generic pricing.
via Bloomberg
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