Gold Holds Near Three-Week High as European Stocks Halt Rallyby and
Bullion has surged this year on haven demand, Fed rate outlook
Indian jewellers strike in protest over planned excise duty
Gold held near a three-week high as European equities halted a rally, bolstering demand for a haven.
Bullion was little changed after closing at the highest since Feb. 11 on Wednesday. While Asian stocks rose amid speculation of increased Chinese stimulus, shares in Europe declined for the first time in a week as investors awaited fresh indications of the strength of the U.S economy.
Investors are focusing on U.S. data for clues on when the Federal Reserve will next raise interest rates. Gold has jumped 17 percent this year after global financial turmoil boosted demand for a store of value and prompted the Fed to signal it will keep rates low. That has increased the metal’s allure because it doesn’t pay interest like some other assets.
“The turnaround in European stock prices is the most supportive factor for gold at the moment,” Thorsten Proettel, a commodity analyst at Landesbank Baden-Wurttemberg, said by phone from Stuttgart, Germany. “It’s a pretty impressive performance from gold this year, with investor flows continuing to support despite strength in the dollar.”
Bullion for immediate delivery added 0.2 percent to $1,242.52 an ounce by 10:26 a.m. in London, according to Bloomberg generic pricing. Holdings in gold-backed exchange-traded products gained a 15th day as of Wednesday to the highest since September 2014, data compiled by Bloomberg show.
Indian jewellers are staging a strike to protest plans of a 1 percent excise duty on jewelry produced and sold within the country. A similar shutdown in 2012, when jewelers closed for three weeks, was successful in getting the-then Manmohan Singh government to drop plans for an excise duty. India is the second-largest gold buyer.
In other metals:
- Silver was little changed at $14.95 an ounce. Platinum added 0.2 percent and palladium rose 0.3 percent.
- The FTSE/JSE Africa Gold Mining Index gained 1.9 percent, rebounding from Wednesday’s 5 percent drop, the most in two weeks.