Gold firm on safe-haven demand as stocks face headwinds
(Reuters) - Gold edged higher on Monday, trading close to last session's nine-week high as pressure on Asian stock markets supported safe-haven bids for the metal.
Asian share markets swept lower after Wall Street suffered its worst starting week in history and doubts over Beijing's economic competence sent investors into the arms of the safe-haven yen and sovereign bonds.
Spot gold rose 0.1 percent to $1,105 an ounce by 0330 GMT. U.S. gold <GCcv1> gained 0.7 percent to $1,105.2.
"We have some supportive factors in the market such as Saudi Arabia-Iran tensions, devaluation of yuan which have prompted safe have appeal of gold," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers Ltd in Hong Kong.
Gold climbed to its highest since early November on Friday, adding more than 4 percent to its value this year, on concerns over the Chinese economy and tumbling stock markets.
Perceived missteps by China's authorities in controlling their share market and currency have led to concerns Beijing might lose its grip on economic policy too.
China will face great difficulty in achieving economic growth above 6.5 percent over the 2016-2020 period due to slowing global demand and rising labor costs at home, the China Securities Journal quoted a top state adviser as saying.
Investment appetite for bullion showed signs of picking up last week. Holdings of the world’s largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, rose 4.2 tonnes on Thursday, data from the fund showed.
Bullion is often seen as an alternative investment during times of financial uncertainty, although safe-haven rallies tend to be short-lived.
Gold slid 10 percent last year on fears higher U.S. rates would lower demand for the non-interest-paying asset, while boosting the dollar. A stronger greenback makes dollar-denominated gold costlier for holders of other currencies.
Silver rose 0.4 percent at $13.986 an ounce, while platinum lost 0.5 percent at $870.25 an ounce. Palladium was down 1.2 percent to $488.25 an ounce.