JOHANNESBURG: Gold narrowed a weekly loss as Chinese stocks retreated into a bear market and commodities extended declines, increasing demand for a haven. Platinum fell to a seven-year low.
Bullion rebounded from the biggest drop in almost a month as Chinese equities slipped after investors lost confidence in government efforts to manage the country’s markets and economy. The Bloomberg Commodities Index dropped to the lowest since at least 1991, with oil touching a 12-year low on the prospects for more supplies.
Gold has been whipsawed this week, after rallying to a two- month high last Friday as investors sought a store of value following the rout in Chinese shares that spread across the globe. Federal Reserve Bank of Boston President Eric Rosengren this week said that estimates for US economic growth are falling, putting the projected path for interest-rate increases at risk. Low borrowing costs are good for gold, which doesn’t pay interest.
“People are considering prospects for gold as a risk-free asset, so it’s been moving up gently as other markets are being sold off,” Carole Ferguson, an analyst at brokerage SP Angel Corporate Finance LLP, said by phone from London. “I don’t see a sharp move in prices. Prospects for the dollar remain strong, with rates likely to move up in the US”
Gold Prices
Bullion for February delivery rose 0.6 per cent to $1,080.40 an ounce by 6.30am on the Comex in New York. It’s down 1.6 per cent this week, though is still this month’s best-performing metal.
Investors cut holdings in gold-backed exchange-traded products for the first time in six days. Assets declined 0.2 metric ton to 1,484.8 tons as of Thursday, falling from the highest level since the start of December, data compiled by Bloomberg show.
Silver declined 0.4 per cent to $13.793 an ounce in London. Platinum slipped as much as 1.6 per cent to $822.55 an ounce, the lowest since 2008. Palladium dropped 2 per cent to $483.50 an ounce.
