Gold rises amid Indonesia earthquake, declines for US shares

NEW YORK — Gold advanced as a drop in US equities boosted demand for the metal as a haven and an earthquake struck Indonesia, where the world’s biggest bullion mine is located.

A magnitude 7.8 temblor struck off the Indonesian island of Sumatra, in a region where an undersea quake unleashed a tsunami that killed hundreds of thousands in 2004. Freeport-McMoRan Inc’s Grasberg mine is in Indonesia. The Standard & Poor’s 500 Index of equities fell from an almost two-month high.

Bullion has rallied 17 percent this year, outpacing a 2.5 per cent gain in US Treasuries, as investors sought a haven amid mounting concerns about slowing global growth. Gold’s gain is topping gauges of high-yield and investment-grade corporate bonds, the dollar and major stock indexes.

The earthquake “could cause some problems”, Mr Phil Streible, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. “That could affect global growth for sure, and maybe we’ll see equity markets back off a little bit. There are some people who think that the longer-term fundamentals for gold are still strong.”

Gold futures for April delivery climbed 0.9 per cent to settle at US$1,241.80 an ounce (S$61.19 per gramme) at 1.49pm on the Comex in New York. The metal fell as much as 0.5 per cent earlier.

- Inflows into US-listed exchange traded funds backed by precious metals reached US$5.17 billion in February, the biggest monthly addition in seven years, according to data compiled by Bloomberg

- Holdings in bullion-backed exchange-traded products climbed for a 14th straight day to the highest since September 2014. Assets rose 10.8 metric tons to 1,712.8 tons on Tuesday, data complied by Bloomberg show.

- Silver futures gained on Comex, while platinum and palladium futures fell on the New York Mercantile Exchange. The World Platinum Investment Council, an industry lobby group, said the market will remain in deficit in 2016.

- Seven of the Federal Reserve’s 12 regional districts characterised the economy as growing “moderately”, at a “modest pace” or “slightly”, according to the central bank’s Beige Book, an economic survey published eight times a year. BLOOMBERG