Gold rebounded from yesterday’s biggest drop this year as investors sought a haven amid slumping emerging market equities and falling commodities.
Emerging-market stocks dropped as oil extended a rout and data signaled a contraction in Chinese manufacturing. The ruble erased gains it made after Russia raised interest rates by the most since 1998, while industrial metals declined.
“Gold is finding support from the risk-off moves seen across many asset classes,” Ole Hansen, head of commodities strategy at Saxo Bank A/S in Copenhagen, said by e-mail. “The risk-off is related to Russia and the ongoing sell-off in emerging market currencies.”
Bullion slid 2.4 percent in London yesterday, the most since Dec. 19, 2013, as U.S. manufacturing data that beat estimates supported the case for higher borrowing costs next year. Federal Reserve officials meet today and tomorrow to debate the pace of raising U.S. interest rates, which have been near zero since 2008.
Gold for immediate delivery rose 0.5 percent to
$1,199.30 an ounce at 10:47 a.m. in London, according to Bloomberg generic pricing. Gold futures for February delivery fell 0.7 percent to $1,199.50 on the Comex in New York.
The Bloomberg Dollar Spot Index fell 0.5 percent today, after reaching a five-year high earlier this month. U.S. policy makers will consider whether to retain a pledge to keep rates near zero for a “considerable time” after they ended their bond-buying program in October.
Holdings in gold-backed exchange-traded products fell 3 metric tons to 1,608.2 tons as of yesterday, data compiled by Bloomberg show. Assets reached the lowest since 2009 on Dec. 8.
India, last year’s second-biggest bullion buyer, said that its trade deficit widened to the highest since May 2013 as gold imports rose almost seven-fold.
Silver for immediate delivery rose 0.4 percent to $16.2245 an ounce, after plunging by 5.1 percent yesterday. Platinum was little changed at $1,209.88 an ounce. Palladium added 0.3 percent to $800.38 an ounce.
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