Gold jumped in Europe trade on Wednesday as retreating of oil prices, a weaker dollar and losses in global stock markets sustained demand for perceived safer assets. Although the metal being restricted to narrow ranges.
Gold for February delivery on the Comex Exchange tacked on $6.70, or 0.62%, to trade at $1,095.80 a troy ounce.
Spot gold was up 0.2 percent at $1,088.66 an ounce. The metal, while supported by a weaker appetite for risky assets, has faced resistance at around $1,090 with some analysts attributing this to slow Asian physical demand.
Global bourses collapse in oil prices fell to new lows of 13, adding to fears over the prospects for global growth. Japan’s Nikkei 225 entered a bear market Wednesday, while Hong Kong shares hit a three and a half year low.
The pessimistic mood extended to the European equities, where Germany’s DAX sank 3%, while London FTSE 100 fell 2.8%. Moreover, Wall Street pointed to heavy losses in the opening, with Dow futures down 2.3%, or 360 points.
Gold is often viewed as an alternative currency in times of global economic uncertainty and a refuge against financial risk.
The IMF cut its worldwide growth forecast for the third time in under one year, as new figures showed Beijing that China’s economy grew at its slowest pace in a quarter century in 2015.
Confidence about sales growth in the short term among CEOs worldwide has fallen to its lowest level in six years as an engine of China’s economy signals deep concern slows and a drop in in oil prices on global prospects.
The Mint of the United States reduced their weekly allowance of American Eagle silver bullion coins of 1 million ounces, only a quarter of the 4 million ounces that were rationed and being sold last week.
The rupee today the biggest intraday decline of the last 16 months. Indian rupee has been priced at $ 68 to cross. Gold has increased by Rs. 0.75 per cent on MCX and is trading at Rs 26,260.
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