Gold advanced the most in more than a week as the dollar declined and China’s central bank disclosed new stimulus measures, boosting demand for the precious metal as an alternative investment.
The People’s Bank of China started a 500 billion yuan ($81 billion) standing lending-facility to the nation’s five biggest banks, according to Sina.com, which cited Guotai Junan banking analyst Qiu Guanhua. The dollar fell as much 0.5 percent against a basket of currencies. U.S. Federal Reserve officials meet today and tomorrow as investors assess economic data for cues on the timing of an interest-rate increase.
“Gold is getting a bid as the dollar weakened and China has announced some stimulus program,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said. “Tomorrow’s decision on the rates will be the guiding force for gold going forward.”
Gold futures for December delivery climbed 0.3 percent to $1,238.90 an ounce at 12:44 p.m. on the Comex in New York, heading for the biggest gain since Sept. 3. Earlier, prices fell as much as 0.2 percent. Yesterday, the metal slumped to $1,226.30, the lowest for a most-active contract since Jan. 9.
Bullion is heading for the first quarterly loss this year as the Bloomberg Dollar Spot Index advanced to a 14-month high and the Fed moves toward ending its unprecedented monthly asset- purchase program. An improving American economy and equities near all-time highs are also damping investor interest in gold, even as the U.S. expands sanctions against Russia and ramps up its military campaign in Iraq.
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