Gold mining counters rise as bullion rallies

GOLD held near its highest in more than a week, helping push a gauge of mining shares towards the biggest three-day advance since the financial crisis in 2008.

The metal climbed as much as 0.5 percent to $1 153.12 (R15 688.80) an ounce, the highest since September 25, as investors scaled back speculation that the US Federal Reserve would raise interest rates this year.

A Bloomberg measure of gold miners, including AngloGold Ashanti and Randgold Resources, was up more than 17 percent this week, headed for its biggest three-day gain since 2008.

Gold has rebounded from a five-year low in July as turmoil in emerging markets, slower growth in China and patchy US economic data reduced the odds of tighter monetary policy by the Fed.

The International Monetary Fund on Tuesday cut its outlook for global growth this year. Higher rates curb gold’s appeal because it does not pay interest.

“The real turning point for people’s expectations of monetary policy came after a series of weak data points in the US. This helped support the gold price,” said Jens Pedersen, an analyst at Danske Bank. “The jobs numbers last week were very disappointing and that did a lot to change sentiment.”

The metal for immediate delivery was 0.1 percent higher at $1 147.91 an ounce mid-morning in London, according to Bloomberg generic pricing.

Expectations of a rate increase this year have been scaled back from 57 percent a month ago to 37 percent, according to Fed fund futures data compiled by Bloomberg. The odds rise to 58 percent for a move in March. – Bloomberg