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Gold swings as investors weigh crude slump with stimulus bets
[SINGAPORE] Gold fluctuated after a selloff in crude oil tempered optimism in global stocks, and as investors await potential stimulus measures from central banks.
Bullion for immediate delivery rose and fell as much as 0.3 per cent before trading at US$1,340.63 an ounce by 9:52am in Singapore, according to Bloomberg generic pricing. Prices added 0.7 per cent on Wednesday, snapping two days of declines.
Gold has rallied 26 per cent this year as the fallout from the UK vote to leave the European Union and slowing global economic growth boost demand for haven assets. Some risk appetite returned to equity markets this week amid speculation of further stimulus from governments and central banks, but overnight losses in oil helped to spur a return to bullion.
Investors are awaiting details of Japanese Prime Minister Shinzo Abe's stimulus plans and expect more easing from the Bank of Japan. They're also looking at whether the Bank of England will cut interest rates later Thursday.
"Gold's consolidation earlier this week was not unexpected, especially in the face of a risk rally that is all about expected central-bank largesse, rather than improving fundamentals," Jordan Eliseo, Sydney-based chief economist at trader Australian Bullion Co, said by e-mail.
"With the BOE and the BOJ likely to implement further easing measures in due course, we expect gold to remain well bid."