Gold Price Rises as Equity Retreat Spurs Demand for Haven Assets

London (July 19)  Gold rose from its lowest close this month as a drop in equities spurred demand for a haven. The metal gained along with U.S. Treasuries, another haven asset, as European stocks fell from a three-week high. The International Monetary Fund is due to update its projections for world growth on Tuesday and Managing Director Christine Lagarde warned last week that estimates may be cut.

“It is one of those perfect risk-off days when you see more flow for safe haven and the precious metal is shining in that space,” Naeem Aslam, the chief market analyst at Think Markets U.K. Ltd., said by e-mail.

Bullion for immediate delivery added 0.3 percent at $1,332.45 an ounce by 11:03 a.m. in London, according to Bloomberg generic pricing. Prices dropped 0.6 percent on Monday to settle at $1,328.85, the lowest since June 30.

Still, gold has rallied 26 percent this year as the Federal Reserve indicated it will hold interest rates lower for longer, boosting the allure of assets that don’t bear interest. Policy makers around the world are under pressure to unleash more stimulus to limit the fallout from the U.K.’s vote to leave the European Union.

In other precious metals news:
•Holdings in gold-backed exchange-traded funds rose 2.5 metric tons to 2,004.9 tons as of Monday, data compiled by Bloomberg show.
•Silver prices declined 0.3 percent and platinum fell 0.6 percent, while palladium was little changed.

Soiurce: Bloomberg