Gold rebounded from a 16-week low after the dollar’s decline boosted demand for the precious metal as an alternative investment. Platinum and palladium extended slumps.
On the Comex in New York, gold futures for August delivery rose 0.7 percent to $1,160.20 an ounce at 11:32 a.m. Earlier, the price touched $1,145.90, the lowest for a most-active contract since March 18.
The dollar fell from a five-week high against a basket of 10 currencies. On Tuesday, gold tumbled 1.8 percent, the most in nine weeks, after Greece’s economic crisis boosted demand for the greenback as a haven. Holdings in global exchange-traded funds backed by the metal rose for the first time in more than a week.
Gold dropped in the past four quarters, the longest slump since 1997, on speculation the Federal Reserve will increase U.S. interest rates. Higher rates and a stronger dollar curb the metal’s appeal, which generally offers returns only through price gains. On Wednesday, the Fed is scheduled to issue minutes of its June 16-17 meeting.
“The dollar’s drop today comes as a relief for some, and people are buying gold after prices have weakened so much,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said in a telephone interview. “Some bargain hunters returned after prices slipped below $1,150. Also, the market is keenly waiting for the minutes.”
Through Tuesday, gold dropped 12 percent in the past 12 months, while the dollar gained 19 percent against the currency basket.
‘We saw some technical buying below $1,150 help prices higher,’’ Miguel Perez-Santalla, a sales and marketing manager at Heraeus Metals New York LLC, said Wednesday in a telephone interview. “This move could well be temporary as the market will continue to react to the dollar strength.”
Silver futures for September delivery rose 0.8 percent to $15.095 an ounce on the Comex. On Tuesday, the metal touched $14.62, the lowest since Dec. 1.
Platinum futures for October delivery fell 0.7 percent to $1,034.90 an ounce on the New York Mercantile Exchange. Earlier, the price touched $1,010.90, the lowest since Feb. 10, 2009.
Palladium futures for September delivery dropped 0.5 percent to $649 an ounce. The price touched $629.25, the lowest since Nov. 19, 2012.
Platinum and palladium are used in pollution-control devices in cars. In June, China’s passenger-vehicle sales fell for the first time in more than two years, industry data showed on Wednesday.
Aggregate platinum trading was 68 percent above the 100-day average for this time, according to data compiled by Bloomberg. The other metals also topped the average.