London- Gold extended a rebound from a three-month low on concern that economic risks in China and Greece will prompt the Federal Reserve to delay raising interest rates.
Minutes released Wednesday of the Fed’s latest meeting showed policy makers were concerned about weak consumer spending and risks from China and Greece that have since intensified. Gold rose with other commodities on Wednesday as China battled to restore investor confidence after a stock-market rout.
The turbulence overseas poses a risk for US expansion as officials prepare to raise rates for the first time since 2006. Higher borrowing costs curb bullion’s allure because it doesn’t pay interest or give returns like other assets such as bonds and equities.
“The Fed is concerned about the developments in China and Greece, making interest rate hikes in the near future unlikely,” Commerzbank AG analysts wrote in a report Thursday. “Gold finds itself slightly recovered.”
Gold for immediate delivery rose 0.4 percent to $1 163.08 an ounce by 12:35 p.m. in London, according to Bloomberg generic pricing. Prices reached $1 147.36 on Wednesday, the lowest since March 18. Futures for delivery in August were little changed at $1 162 on the Comex in New York.
While Fed officials signaled September is the most likely month for the first rate rise, they lowered their outlook for subsequent increases.
Gold fell 1.8 percent this year as the dollar strengthened against the euro amid an improving U.S. economy and concern about Greece’s debt crisis. Greek Prime Minister Alexis Tsipras faces a midnight deadline to present a plan that includes spending cuts to secure a bailout.
The leaders of all 28 European Union countries will meet in Brussels on Sunday to decide their response to the proposals.
Silver for immediate delivery advanced 1.7 percent to $15.4123 an ounce, gaining a second day. Platinum added 0.2 percent to $1 034.05 an ounce after falling on Wednesday to a six-year low. Palladium fell 0.4 percent to $652.78 an ounce. It dropped to a two-year low on Wednesday.
Bloomberg