Gold reached the highest level in almost 12 weeks as investors assessed the solidity of the U.S. economy amid plunging oil prices, and the impact on the timing of higher borrowing costs.
The precious metal is trading higher for a third day as a report last week showed falling incomes in the world’s largest economy even as hiring accelerated.
On Jan 13, bullion for immediate delivery rose as much as 0.5 percent
to $1,239.34 an ounce, the highest price since Oct. 23, and
traded at $1,235.76 at 2:58 p.m. in Singapore, as Bloomberg reports.
Oil prices at the lowest in 5 1/2 years are hurting global
equities and threatening to push inflation further below the
Federal Reserve’s 2 percent target.
Data this week may show the cost of living in the U.S. fell by the most in almost six years and retail sales slid in December, spurring speculation the Fed may hold back from the first rate increase since 2006. This sent the Bloomberg Dollar Spot Index down.
John Williams, Fed Bank of San Francisco President, who will
vote on policy this year, said raising rates in June would be a
close call amid “strong momentum” in the labor market and
weaker wage gains. Atlanta Fed chief Dennis Lockhart, also a
voting member of the policy-setting Federal Open Market
Committee this year, has said that rate liftoff in mid-2015
would probably be justified.
Gold priced in euros surged to the highest since September 2013 as the European Central Bank moves toward adding stimulus to fight deflation and revive growth amid political uncertainty in Greece. The country that triggered the region’s sovereign-debt crisis in 2009 is preparing for a Jan. 25 election that Prime Minister Antonis Samaras has said may lead to an exit from the currency bloc should the opposition Syriza party win.
Gold for February delivery added as much as 0.8 percent to $1,242 an ounce on the Comex in New York, the highest since Oct. 23. Assets in the SPDR Gold Trust, the world’s largest exchange-traded product backed by bullion, were unchanged yesterday after rising on Jan. 9 by the most since July.
As of other precious metals, silver for immediate delivery rose as much as 1.7 percent to $16.858 an ounce, the highest level since Dec. 15, and traded at $16.7594. Platinum was little changed at $1,241.75 an ounce. Palladium fell 0.3 percent to $808.28 an ounce, after rising yesterday to $814.75, the highest level since Dec. 29.
