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Gold cuts best weekly gain in a month as global equities rally
[SINGAPORE] Gold pared its biggest weekly advance in a month as a rebound in equities curbed demand for the metal as a haven.
Bullion narrowed its weekly gain to 0.6 per cent as European stocks rose from the lowest level since February. Gold jumped 1.5 per cent on Thursday after Federal Reserve minutes indicated policy makers remained cautious about raising US interest rates.
"European stocks have edged higher this morning and gold is modestly lower," Jonathan Butler, a precious metals strategist at Mitsubishi Corp, said by phone from London.
"With the yield environment likely to remain favorable to non-interest bearing assets such as gold in the medium term, there is room for gold to make further gains, but on a short-term basis yesterday's rally is now being sold."
Gold posted its best quarterly gain in three decades through March as worries about global growth and market turmoil prompted the Fed to delay further rises in borrowing costs. The odds of policy makers moving in December have dropped to 48 per cent from 58 per cent at the beginning of this week, Fed-fund futures data show.
Bullion for immediate delivery fell 0.8 per cent at US$1,230.28 an ounce by 11.16 am in London, according to Bloomberg generic pricing. It's the best-performing commodity this year, with a 16 percent gain.
US policy are due to meet at the end of the month. Fed Chair Janet Yellen said on Thursday that she continues to see some slack remaining in the US labour market even as the economy shows "tremendous progress" after the financial crisis and the worst recession since the Great Depression.