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Gold on Wednesday gained as a drop to the lowest level in more than three months and a weaker dollar spurred buying while holdings in exchange-traded funds rose to a record.
Gold gained 0.3 per cent to $1,675.81 an ounce. The price fell to $1,661.10 yesterday, the lowest since August 31. Silver also rose 0.2 per cent to $31.70 an ounce, up 14 per cent for the year.
Physical demand from top buyer India has been “above average” this week, volumes in China are also strong, and buying out of Europe is “notable”, UBS said in a report today.
The US Dollar Index, a gauge against six counterparts, fell 0.3 per cent to the lowest level since October 18, amid speculation US lawmakers will reach an agreement on the budget, reducing demand for safer assets. Gold typically trades counter to the US currency.
Gold is up 7.2 per cent this year, heading for a 12th annual gain, after central banks from the US to China and Europe took action to prop up economies. Holdings in gold— backed exchange—traded products increased to a record 2,631.43 tonnes.
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