Gold headed for the first weekly increase this month as a retreat in global equities and tensions in the Middle East boosted demand for a protection of wealth, countering expectations for higher U.S. borrowing costs.
“Gold has been helped by geopolitics and weaker equity markets,” Zhu Runyu, an analyst at CITICS Futures Co., a unit of China’s biggest listed brokerage, wrote in an e-mail today. “The longer-term downtrend remains intact as the U.S. economy and hence the dollar strengthens.”
Gold for December delivery rose 0.4 percent to $1,226.90 an ounce on the Comex in New York, extending yesterday’s 0.2 percent climb. Holdings in the SPDR Gold Trust, the biggest gold-backed exchange-traded product, were unchanged for a second day yesterday after dropping to 773.45 metric tons on Sept. 23, the least since December 2008.
Silver for immediate delivery rose 0.8 percent to $17.6619 an ounce, halting two days of declines and paring a fourth weekly retreat. Prices dropped to $17.3491 on Sept. 22, the lowest level since July 2010.
Spot platinum traded at $1,317.38 an ounce from $1,314.38 yesterday, when prices fell to $1,300.38, the lowest since June 2013. Palladium increased 0.6 percent to $806.50 an ounce after dropping to $795.33 yesterday, the lowest since April. Both metals are also set for a fourth week of losses.
Gold remains on course for the first quarterly loss this year as the Bloomberg Dollar Spot Index climbed to a four-year high. A report today may show the U.S. economy grew more than previously estimated after data yesterday showed jobless claims rose less than forecast. Saudi Arabia, Jordan, Bahrain, Qatar and the United Arab Emirates joined the first wave of U.S.-led airstrikes against Islamic State militants in Syria this week.
Asian stocks fell after the Standard & Poor’s 500 Index dropped the most in almost two months. The MSCI All-Country World Index is heading for the biggest monthly loss since January amid concern that Chinese growth is slowing and the Federal Reserve may increase U.S. interest rates sooner than some investors expect.
