Safe haven gold avoids meltdownGold was spared the global market rout that has sent commodities to the lowest level since 1999 as investors sought haven assets.
Bullion for immediate delivery traded 0.2 percent lower at $1,158.10 an ounce at 1:45 p.m. in Singapore, according to Bloomberg generic pricing. The metal capped a 4.1 percent weekly advance on Friday, when prices rose to as much as $1,168.39, the highest level since July 7.
Mounting concern that global growth is faltering pummeled shares, emerging-market currencies and commodities last week, and the selloff deepened on Monday. Stock gauges from Japan to Australia sank with U.S. index futures, while China’s stocks plunged. Commodity prices sank to a 16-year low as crude oil and base metals retreated.
“Markets are nervous - and this is always good news for gold,” Gavin Wendt, managing director of Mine Life Pty in Sydney, said. “True investors have once again used market weakness as a tremendous buying opportunity, reinforcing my positive view on gold.”
The worldwide rout is shaking confidence that the global economy will be strong enough to withstand higher U.S. interest rates, diminishing prospects for tighter policy and buoying bullion. The dollar fell 0.2 percent on Monday.
“The market reality is that any eventual Fed interest rate increase is likely to be very small - likely in the vicinity of a mere 0.25 percent initially,” Wendt said. That “would still leave rates comfortably in negative territory in real terms. Historically, gold’s strongest periods of price appreciation have coincided with rising interest rates.”
The Kansas City Fed hosts its annual symposium in Jackson Hole, Wyoming, from Thursday. The market may be starting to realize the Fed may not raise the cash rate in September, David Lennox, an analyst at Fat Prophets in Sydney, said on Monday.
Traders see the likelihood of a U.S. interest rate rise next month at 28 percent, data compiled by Bloomberg show. The prospect of higher rates makes gold unattractive because the metal doesn’t pay interest.
Bullion of 99.99 percent purity advanced as much as 0.9 percent to 240.16 yuan a gram ($1,167.83 an ounce) on the Shanghai Gold Exchange, up for a sixth day.
Gold futures for December delivery were little changed at $1,159.70 an ounce on the Comex after jumping 4.2 percent last week.
Silver for immediate delivery fell 1.2 percent to $15.1416 an ounce, while palladium retreated 1.6 percent to $592.90 an ounce. Platinum lost 0.4 percent to $1,015.65 an ounce. Bloomberg
with the Korea JoongAng Daily
To write comments, please log in to one of the accounts.
Standards Board Policy (0/250자)