Gold Holds Near One-Week High as Equity Slump Fuels Haven Demand – Bloomberg

Gold held near the highest in a week as investors sought a haven from recent equity declines sparked by concerns of a deepening slowdown in China.

Bullion futures for December delivery were little changed at $1,138.70 an ounce by 7:32 a.m. on the Comex in New York. The release of monthly U.S. employment data on Friday may provide clues on whether the Federal Reserve will raise borrowing costs at its September meeting. Higher rates curb the allure of bullion because the metal doesn’t pay interest or offer returns.

“We’re seeing greater recognition of gold’s safe haven qualities,” David Jollie, head of research at Mitsui & Co Precious Metals Inc. in London, said by phone Wednesday. “The jobs numbers later this week will be closely watched, as a higher reading will reinvigorate those who have the view that we will see higher rates sooner rather than later.”

Gold climbed last month for the first time since May as a selloff in Chinese stocks, an unexpected devaluation of the yuan and speculation that the Fed will delay raising interest rates increased the metal’s appeal. Futures increased 3.4 percent in August.

Jobs Report

U.S. employers probably added 218,000 workers in August, holding above 200,000 for a fourth month, according to economists surveyed by Bloomberg. The unemployment rate probably declined to 5.2 percent, a seven-year low, a Bloomberg survey showed.

“While the jobs market has been pretty solid, inflation data have not done so well to justify a rate hike in September,” Bernard Aw, a strategist at IG Asia Pte, said by phone in Singapore. “My best guess is still in December. In the longer term, people are expecting interest rates to go up, so they don’t want to hold gold even as a safe-haven asset.”

Gold for immediate delivery was little changed at $1,139.70, according to Bloomberg generic pricing. Holdings in exchange-traded products backed by bullion posted the first back-to-back decline since Aug. 14, data compiled by Bloomberg as of Tuesday showed.

Silver for December delivery fell 0.6 percent to $14.54 an ounce in New York. Platinum for October was little changed at $1,007.30 an ounce. Palladium for December fell 0.9 percent to $574.25 an ounce.