Gold rebounds from biggest decline in seven weeks

gold-barsGold gained, recovering from the biggest decline in more than seven weeks, as a decline in stocks fueled safe-haven demand.

Bullion gained after U.S. stocks fell yesterday as consumer confidence trailed projections and companies posted worse-than- expected results. The metal tumbled by the most since June 5 yesterday as the Dollar Index, a six-currency gauge of the greenback’s value, rebounded from a 2009 low.

“People naturally favor gold when a decline in equities fans sentiment for a flight to quality,” said Charles Lee, a metals trader with Eugene Investment & Futures Co. in Seoul. “But there’s no sign of improvement in physical investment at the moment.”

Gold for immediate delivery rose 0.3 percent to $940.55 an ounce at 9:17 a.m. in Singapore. The metal is up 6.6 percent this year. The dollar weakened to $1.4187 against the euro from $1.4167 yesterday.

Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, decreased 3.36 metric tons to 1,083.25 metric tons as of July 28, according to figures on the company’s Web site.

Separately, South African gold producers agreed to boost workers’ pay by between 9 percent and 10.5 percent this year, concluding negotiations, the Chamber of Mines said in an e- mailed statement yesterday.

Among other precious metals for immediate delivery, silver was up 0.1 percent at $13.74 an ounce, platinum was up 0.6 percent at $1,208 an ounce and palladium was down 1 percent at $257.50.

Source: Bloombeg

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