Gold futures rose to the highest in more than five weeks as declines in equity markets revived demand for the metal as a haven.
More than $100 billion was wiped from the value of world equity markets yesterday, and global shares are falling again today. The dollar headed for the biggest loss in a month against a basket of 10 currencies.
Prices have rebounded more than 7 percent since reaching a four-year low last month. Signs that central banks in Europe and Asia will increase money supplies have reignited the metal’s appeal as a store of value. Swings in oil prices are increasing bullion’s volatility as traders judge the outlook for inflation.
“There are equity market concerns and an increase in the flight away from risky assets to quality,” James Steel, an analyst at HSBC Securities (USA) Inc. in New York, said in a telephone interview. “Gold seems to be benefiting from that more than anything else.”
Gold futures for February delivery climbed 2 percent to $1,219.30 an ounce at 9:36 a.m. on the Comex in New York, after touching $1,222.20, the highest since Oct. 29.
India, which accounts for about a quarter of global bullion demand, eased import restrictions on the metal, Finance Minister Arun Jaitley said today. The nation may change a rule mandating that “star trading houses” export all of their gold imports, Reuters reported today, citing an unnamed source.
“Gold is climbing after news out of India that they are lifting the import restrictions on gold,” Graham Leighton, a trader at Marex Spectron Group in New York, said in a telephone interview.
via Bloomberg
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Alfonso Esparza