Gold has risen this month and the dollar and global equities weakened as Federal Reserve officials indicated a worldwide economic slowdown may delay U.S. interest-rate increases. Crude traded in New York fell for the fifth time in six days. Some investors judge that lower oil prices can curb inflation, reducing the appeal of gold as hedge.
Gold traded little changed below the highest price in almost four weeks as investors weighed falling oil prices against concern economic growth is slowing.
Bullion erased this year’s gains earlier this month as signs of an improving U.S. economy added to the case for higher borrowing costs. Rising interest rates reduce gold’s allure because the metal generally only offers investors returns through price gains, while a stronger dollar typically cuts demand for a store of value.
Gold for immediate delivery slipped 0.3 percent to $1,232.59 an ounce by 9:41 a.m. in London. It reached $1,237.86 yesterday, the highest since Sept. 17. Gold for December delivery added 0.2 percent to $1,232.60 on the Comex in New York.
Futures trading volume was 16 percent below the average for the past 100 days for this time of day. Gold rose from this year’s low of $1,183.24 set Oct. 6 in London.
West Texas Intermediate reached the lowest price since 2012 last week. Inflation expectations, measured by the five-year Treasury break-even rate, are near the lowest since June 2013.
Holdings in gold-backed exchange-traded products rose 3.7 metric tons yesterday, the first increase in two weeks, to 1,666 tons, data compiled by Bloomberg show. Assets slipped to a five-year low last week.
Silver for immediate delivery was little changed at $17.4945 an ounce in London. Palladium rose 1 percent to $792.26 an ounce. Platinum climbed 0.8 percent to $1,273.68 an ounce.