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Gold rebounds from 2-day drop

  • SOURCE: | qwesa2big
  • 1.8838576Gold snapped two days of losses as Asian stocks fell and a slump in crude oil damped the outlook for inflation, signaling further potential delays in U.S. rate increases.

    Bullion for immediate delivery rose as much as 1 percent to $1,227.63 an ounce and traded at $1,227.25 at 2:17 p.m. in Singapore, according to Bloomberg generic pricing. The metal lost 1.4 percent in the past two days.

    Gold has rallied 16 percent this year on the back of the Federal Reserve’s commitment to a gradual approach in raising borrowing costs amid reduced inflation expectations. Asian equities lost 1.6 percent on Tuesday following a drop in the Standard & Poor’s 500 Index overnight as oil tumbled. Fed Chair Janet Yellen said last week caution was warranted in tightening policy amid heightened risks posed by the global economy, with Fed Funds futures showing that traders are pushing back the timing of possible increases.

    “Yellen’s statement last week was a game-changer — it clearly indicated that the Fed is going to take a very cautious approach to rate increases and that they are skeptical about inflation being too strong,” Ric Spooner, chief analyst at CMC Markets in Sydney, said by phone. “With oil now under pressure, again that makes the prospects for a significant or on-going growth in inflation less likely.”

    • A gauge of the dollar slumped to a nine-month low last week.

    • The Fed is scheduled to release minutes from its March 15-16 meeting on Wednesday.

    • Bullion of 99.99 percent purity on the Shanghai Gold Exchange fell as much as 0.8 percent to 254.96 yuan a gram ($1,225.75 an ounce). Financial markets in China were closed on Monday for a holiday.

    • Holdings in exchange-traded funds backed by gold fell 1.2 metric tons to 1,763.2 tons on Monday, according to data compiled by Bloomberg.

    • Spot silver climbed 1.3 percent to $15.1075 an ounce. Platinum gained 0.9 percent to $950.35 an ounce, while palladium added 0.7 percent to $554.20 an ounce.


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