Flight to safety keeps gold near 7-week high as stocks retreat | Reuters

Flight to safety keeps gold near 7-week high as stocks retreat
| Reuters

SINGAPORE Gold traded near a seven-week high on Thursday as investors channelled money into the safe-haven metal amid a global stock market rout, worries over the Chinese economy and heightened geopolitical tensions.


* Spot gold XAU= had eased 0.1 percent to $1,092.90 an ounce by 0043 GMT. But it wasn't far from $1,095.30 reached on Wednesday, its highest since Nov. 16.

* Gold benefited from the risk-averse sentiment in the market, along with other haven assets such as the Japanese yen and U.S. Treasuries.

* Stocks across the globe fell on Wednesday to their lowest in nearly three months as a move to weaken China's currency fuelled fears about the strength of the world's second largest economy and as Brent crude hit its lowest since 2004.

* A raft of data releases from China in coming weeks is likely to show activity continuing to slow, adding to global concerns about the country's economic outlook for 2016.

* The World Bank on Wednesday cut its global economic growth forecast for 2016, saying the weak performance of major emerging market economies will tamp activity overall, as will anaemic showings from developed countries such as the United States.

* Adding to those worries was North Korea's announcement that it had successfully tested a powerful nuclear bomb on Wednesday. The move drew threats of further sanctions even though the United States and weapons experts voiced doubts the device was as advanced as the isolated nation claimed.

* The news came just days after tensions flared in the Middle East between Saudi Arabia and Iran after Riyadh executed a Shi'ite cleric critical of Saudi policy.

* Gold is often seen as an alternative investment during times of geopolitical and financial uncertainty.

* Bullion was also supported by a softer dollar and the release of the minutes of the Federal Reserve's December policy meet, when the U.S. central bank raised interest rates for the first time in nearly a decade.

* The minutes assured markets that the Fed would hike rates gradually this year. The minutes made clear that some officials will be wary of further increases if higher inflation does not materialise, and all agreed that persistently low inflation was a worry.

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.22 percent to 640.97 tonnes on Wednesday, close to a seven-year low.

* For the top stories on metals and other news, click [TOP/MTL] or [GOL]


* The yen hovered at multi-month highs against its peers early on Thursday after investors snapped up the safe-haven currency as global uncertainty sapped risk appetite.

(Reporting by A. Ananthalakshmi; Editing by Joseph Radford)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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Updated Date: Jan 07, 2016 07:30:11 IST

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