Gold rebounded from yesterday’s biggest drop this year as investors sought a haven amid turmoil in emerging market economies and falling commodities.
Russia’s ruble plunged to a record low after the country’s largest interest-rate increase in 16 years failed to revive confidence in the currency. The Turkish lira also tumbled to an all-time low. Equities around the world retreated as oil extended a rout and data signaled a contraction in Chinese manufacturing. Industrial metals declined.
“Gold is finding support from the risk-off moves seen across many asset classes,” Ole Hansen, head of commodities strategy at Saxo Bank A/S in Copenhagen, said by e-mail. “The risk-off is related to Russia and the ongoing sell-off in emerging market currencies.”
Gold for immediate delivery rose 1.8 percent to $1,214.18 an ounce at 12:45 p.m. in London. Yesterday’s 2.4 percent drop was the biggest since Dec. 19, 2013. Gold futures for February delivery increased 0.6 percent to $1,214.40 on the Comex in New York, erasing an earlier drop.
The Bloomberg Dollar Spot Index fell 0.7 percent today, after reaching a five-year high earlier this month. Federal Reserve officials meet today and tomorrow to debate the pace of raising U.S. interest rates, which have been near zero since 2008. Policy makers will consider whether to retain a pledge to keep rates near zero for a “considerable time” after they ended their bond-buying program in October.