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Gold advances in longest rally since October on haven demand
[SINGAPORE] Gold climbed for a third day as North Korea's first nuclear test in almost three years spurred demand for haven assets amid concern China's slowdown is deepening.
Bullion for immediate delivery gained as much as 0.5 per cent to US$1,083.42 an ounce and was at US$1,082.14 by 4 pm in Singapore, according to Bloomberg generic pricing. The three-day rally was the longest run of gains since Oct 14.
North Korea said it successfully tested its first hydrogen bomb, the fourth time it has detonated a nuclear device and a move that reignites tensions with neighborus. The move aided bullion's gains, said Madhavi Mehta, an analyst at Mumbai-based Kotak Commodity Services Ltd. A private Chinese services gauge slumped to the second-lowest reading since the series began a decade ago and close to a level signaling contraction.
"Largely supporting price is safe haven buying amid concerns about China," Mr Mehta said in an e-mail. "Chinese services data released today disappointed."
Gold rallied on Monday amid a global equity rout triggered by a selloff in China's stocks and mounting tension between Saudi Arabia and Iran. The focus will move back to the US as investors await Federal Reserve minutes and jobs data later Wednesday, said Mr Mehta.
The Fed is scheduled to release minutes from its December meeting, at which policy makers boosted borrowing costs for the first time since 2006. The central bank's policy makers said the pace of tightening would be gradual and depend on firming labor and inflation data.
Spot silver was little changed, while platinum lost 0.3 per cent and palladium retreated 0.5 per cent.