Gold climbed for the first time in three sessions amid speculations that there will be a delay by the Federal Reserve to increase US interest rates as the global economic growth slumps.
The metal rebounded significantly after dropping to the lowest in a year earlier this month amid growth jitters that prompted aggressive sell offs by stock markets.
According to CNBC, spot gold gained 0.7% to $1,245.95 per ounce while April delivery gold futures rose $7.60 per ounce to $1,246.60.
Ole Hansen, Saxo Bank’s head said, “Gold sentiment I would say has moved from negative to neutral, but as long the market continues to expect renewed dollar strength, then the upside seems limited.”
He added, “I, like most others, am keeping an eye on whether the $1,250/55 (level) can be broken. If that happens then we should see some additional liquidation of short positions.”
US policy makers identified the slowing global economies as a risk to the US economy. On October 16, James Bullard, St. Louis Fed Bank President, said that the central bank should consider delaying the end of the bond buying program. Government data shows that money mangers increased bullish wagers on gold for the first time in nine weeks.
Bloomberg quoted Optionsellers.com founder, James Cordier as having said, “Gold is getting a bid today because the Fed may maintain low interest rates amid all the economic uncertainties. Gold’s safe-haven premium is rising.”
In the previous two trading sessions, the metal had dropped 0.5%.
December delivery silver futures rose 15 to $17.495 per ounce on the Comex.
On the New York Mercantile Exchange, December delivery palladium futures gained less that 0.1% to $756.75 per ounce. January delivery platinum futures gained 0.9% to $1,272.30 per ounce. On October 16, the spot price fell below gold for the first time from April 2013.
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