LONDON: Gold climbed, trimming a second weekly decline, as a drop in equities boosted demand for the metal as haven.
Gold rose as much as 1 per cent as European stocks retreated for a third day after weakening corporate earnings eroded investor confidence. The metal gained even after Regional Federal Reserve chiefs for Boston and Kansas City said Thursday that the central bank risks stoking an asset bubble by delaying raising interest rates for too long.
Bullion rallied 20 per cent this year as traders pared back expectations for the pace of US rate increases, boosting gold’s appeal against interest-bearing assets. Still, prices are down 1.2 per cent this week as the dollar rebounded, curbing demand for an alternative investment. The Bloomberg Dollar Spot Index rose 0.2 per cent Friday.
“Gold has managed to resist the headwind being generated by the stronger dollar, with the focus instead being fixed on lower stocks and falling bond yields,” Ole Hansen, head of commodity strategy at Saxo Bank A/S, said by email.
Bullion for immediate delivery gained 0.8 per cent to $1,274.10 an ounce by 11.51am in London, according to Bloomberg generic pricing. Prices reached the highest in more than a year on May 2.
Holdings in bullion-backed exchange-traded products increased for a 13th day on Thursday, data compiled by Bloomberg show. Assets rose 3.7 metric tons to 1,814.7 tons, the highest since December 2013.
