Gold swung between gains and losses in London, amid speculation further central bank stimulus will boost demand for the metal as a protection of wealth.
The yen headed for its steepest weekly drop since June against the dollar on prospects Japan’s opposition party will take power after elections next month and increase pressure on the central bank to expand monetary easing. Global equities reached a three-month low yesterday. Gold demand fell 11 per cent in the third quarter, as slowing growth in China cut investment and jewelry buying, the World Gold Council said yesterday.
“Though the market absorbed some negative news from the World Gold Council, and equity markets remaining soft, gold is holding up fairly well,” Jim Pogoda, a trading consultant for New York-based Gold Bullion International, said yesterday in an e-mail. “The overriding bullish factor that central banks are firmly on track to continue stimulating their economies for the foreseeable future remains intact, cushioning dips and fueling rallies.”
Gold for immediate delivery was down 0.2 per cent at $1,711.76 an ounce by 9:18 am in London. Prices rose as much as 0.1 per cent and fell as much as 0.3 per cent today and are down 1.1 per cent this week. Gold for December delivery was little changed at $1,711.60 an ounce on the Comex in New York.
CME Group Inc cut the amount that speculators must keep on deposit for an initial account in gold futures.
