Gold re­bounds on flight to safety

Kuwait Times - - BUSINESS -

LON­DON: Gold re­bounded yes­ter­day from last week’s six-year low as the at­tacks in Paris prompted a bout of global risk aver­sion. Spot gold rose as much as 1.4 per­cent to a 10-day high of $1,097.90 an ounce, with US gold fu­tures gain­ing more than 1 per­cent to a ses­sion high of $1,097.40.

In the first 10 min­utes of yes­ter­day trade, nearly 3,000 lots changed hands, al­most 10 times the 300-lot av­er­age for the open­ing 10 min­utes over the past two months, Reuters’ cal­cu­la­tions showed.

“Gold opened higher early this morn­ing on the back of what hap­pened over the week­end on per­ceived geopo­lit­i­cal risk, but it seems to be al­ready short-lived be­cause the big­ger macroe­co­nomic is­sues are the dol­lar’s strength and the (ex­pected) US rate hike,” Citi strate­gist David Wil­son said.

Prices were up 0.2 per­cent at $1,085.81 at 1433 GMT. “The metal is strug­gling to make it back above $1,100,” Saxo Bank se­nior man­ager Ole Hansen said.

Be­fore Mon­day’s gains, gold had fallen for 12 ses­sions out of 13 on in­creas­ing bets that the Fed­eral Re­serve would raise US in­ter­est rates next month, which would in­crease the op­por­tu­nity cost of hold­ing the non-yield­ing as­set. It hit a near-six-year low of $1,074.26 on Thurs­day.

Euro­pean shares stead­ied, al­though travel and leisure stocks slumped, while the euro was pinned near seven-month troughs against the dol­lar, as in­vestors con­cerned about the eco­nomic im­pact on the euro zone from Fri­day’s Paris at­tacks steered clear of the com­mon cur­rency.

Gold is typ­i­cally seen as a safe refuge dur­ing times of un­cer­tainty. How­ever, there has not been an in­crease in de­mand from re­tail in­vestors since the Paris at­tacks, Ger­man coin dealer De­gussa said in an emailed state­ment. “(Buy­ing was) al­ready rel­a­tively high through­out last week, but the rea­son for that was clearly the most re­cent price drop,” it said.

Track­ing gold, other pre­cious met­als all gained. Sil­ver rose 0.2 per­cent to $14.27 an ounce, plat­inum was up 0.3 per­cent at $858.90 and pal­la­dium climbed 1.6 per­cent to $544.50. —Reuters

—AFP

KARACHI: Pak­istani stock­bro­kers mon­i­tor the lat­est share prices dur­ing trad­ing at the Karachi Stock Ex­change (KSE) in Karachi yes­ter­day. Asian mar­kets mostly fell fol­low­ing the deadly week­end terror at­tacks in Paris — with air­line stocks tak­ing a beat­ing on con­cerns over the tourism in­dus­try.

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