Gold’s gain drives miners toward biggest 3-day gain since 2008
London (Oct 7) Gold held near its highest in more than a week, helping push a gauge of mining shares toward the biggest three-day advance since the financial crisis in 2008.
The metal climbed as much as 0.5 percent to $1,153.12 an ounce, the highest since Sept. 25, as investors scale back on speculation the Federal Reserve will raise interest rates this year. A Bloomberg measure of gold miners including AngloGold Ashanti Ltd. and Randgold Resources Ltd. is up more than 17 percent this week, headed for its biggest three-day gain since 2008.
Gold has rebounded from a five-year low in July as turmoil in emerging markets, slower growth in China and patchy U.S. economic data reduced the prospects for tighter monetary policy by the Fed. The International Monetary Fund on Tuesday cut its outlook for global growth this year. Higher rates curb the appeal of gold because it doesn’t pay interest.
“The real turning point for people’s expectations of monetary policy came after a series of weak data points in the U.S., which has helped support the gold price,” Jens Pedersen, an analyst at Danske Bank A/S in Copenhagen, said by phone. “The jobs numbers last week were very disappointing and that did a lot to change sentiment.”
The metal for immediate delivery was 0.1 percent higher at $1,147.91 an ounce by 10:32 a.m. in London, according to Bloomberg generic pricing. Futures on the Comex were also 0.1 percent higher at $1,147.70 an ounce, figures from the bourse show.
Expectations of a rate increase this year have been scaled back from 57 percent a month ago to 37 percent, according to Fed fund futures data compiled by Bloomberg. The odds rise to 58 percent for a move in March.
Holdings in gold-backed exchange traded funds fell 1.05 metric tons to 1,530.74 tons by Tuesday, down from near the highest level since July.
Silver was little changed at $15.8883 an ounce, after rallying to $16.0955 on Tuesday, the highest since June 23. Platinum climbed 0.5 percent to $940.65 an ounce, while palladium fell 0.4 percent to $705.70 an ounce.
Source: Bloomberg
