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Gold nears three-week high as 'risk-off' mood increases demand
[SINGAPORE] Gold rose to the highest level in almost three weeks on increased demand for haven assets as Asian stocks dropped.
Bullion for immediate delivery advanced as much as 0.8 per cent to US$1,251.09 an ounce, the highest level since March 22, and was at US$1,250.28 at 9:26 am in Singapore. The metal climbed 1.5 per cent last week, the most since the period to March 4, according to Bloomberg generic pricing.
Gold's gains follow its best quarterly rally in three decades as investors sought out bullion as a store of value amid weakness in equities and reduced bets that the Federal Reserve will boost interest rates this year. RBC Capital Markets raised its average gold-price forecast for this year by 9 per cent on the Fed's more dovish posture and rising demand, according to a report received on Monday. Bullion has climbed 18 per cent in 2016 as global stocks fell 1.5 per cent.
"If gold does build on this rally today, it's likely to reflect a risk-off sentiment in equity markets as concerns develop about the strength of the Japanese yen," said Ric Spooner, a chief analyst at CMC Markets in Sydney.
Japanese shares drove losses in Asia after the yen headed for the longest advance since 2012.