The prices of gold held sharp gains during the night on Wednesday as oil prices retreated and steep falls in global stock markets bolstered the demand for safe assets as risk aversion in the market sent equities tumbling.
On the Comex Exchange Gold for April delivery rose to an intraday peak of $1,246.40 a troy ounce, the most since February 12, before trading at $1,245.20, up $22.60, or 1.83%.
Spot gold eased slightly to $1,225.60 an ounce, after gaining about 1.5 per cent in the previous session.
A day earlier, the prices of gold progressed $ 12.50, or 1.03%, as investors sought safer assets amid heavy losses in oil prices and world equity markets.
Equity markets were under heavy selling pressure such as prolonged weakness in oil prices and ongoing concerns surrounding the global growth prompted investors to shun riskier assets.
Instead, investors favored safer assets such as the Japanese yen and the German and US government bonds.
The prices of gold have been well supported the last few weeks amid mounting speculation that the Fed might slow the pace of its tightening during the rest of 2016.
Investors have been funneling money into precious metals, as shown by flows into exchange traded funds (ETF).
The assets of SPDR Gold Trust, the top gold-backed ETF, are at their highest since March 2015. Entries for the fund since the beginning of the year already exceeded outflows for the whole of 2015.
Entries so far have been able to compensate for the lack of interest from key Asian buyers, who have taken advantage of the meeting to sell gold bullion and take profits.
Discounts in India are on a record of about $ 50 an ounce to benchmark global index, while in China are around $ 1.
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