Gold advances from two-month lowComment on this story
Gold rose in New York, rebounding from a two-month low, as investors awaited speeches by Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi today at a meeting of central bankers.
Bullion declined 1.9 percent this week as the dollar climbed to an 11-month high against the euro on signs that the U.S. is recovering while Europe’s economy falters. Data this month showed U.S. home sales rose and manufacturing accelerated while euro-area growth stalled in the second quarter.
“Relative calm has been restored to the gold market ahead of the much anticipated Fed symposium later today,” UBS AG analyst Edel Tully said in a report. “The return of physical demand likely helped gold find its floor yesterday.”
Gold for December delivery rose 0.5 percent to $1,281.60 an ounce by 7:30 a.m. on the Comex in New York on volumes that were 37 percent lower than the 100-day average for this time of day, data compiled by Bloomberg show.
The metal yesterday dropped to $1,273.40, the lowest level since June 18, as minutes of the Fed’s last meeting signaled that policy makers may raise interest rates earlier than expected. Gold for immediate delivery rose 0.3 percent to $1,280.63 an ounce in London, according to Bloomberg generic pricing.
CME Group Inc. reduced the margin requirements on Comex gold trading, cutting the minimum cash deposit for speculators 15 percent to $5,060 per 100-ounce contract at the close today.
Speculation that the U.S. central bank would cut stimulus as the economy recovered fueled a 28 percent drop in gold prices last year. Yellen and Draghi are scheduled to speak today at the Kansas City Fed’s symposium in Jackson Hole, Wyoming.
Bullion is still 6.6 percent higher this year as tensions in the Middle East and Ukraine boosted haven demand. Israel vowed to target more Hamas leaders after yesterday killing three commanders, while the U.S. said the militant Islamic State poses an “imminent threat” after American journalist James Foley was beheaded. The first trucks carrying humanitarian aid from Russia crossed the border to Ukraine.
Silver for delivery in December rose 0.4 percent to $19.565 an ounce. The metal dropped yesterday to $19.355 an ounce, the lowest since June 12, and is heading for the first weekly gain in six weeks.
Platinum for delivery in October advanced 0.4 percent to $1,424.30 an ounce. It fell as much as 1.1 percent yesterday to $1,414 an ounce, the lowest since May 1. Palladium for September delivery gained 0.4 percent to $883.