Gold climbs from four-month low on Chinese recovery


NEW YORK/LONDON: Gold pared gains on Thursday after climbing from the prior session's four-month low as a recovery in Chinese shares cooled fears of a wider rout in the major bullion consumer while strength in the US dollar kept a lid on gains.

The gold market was subdued after minutes from the US Federal Reserve's last meeting, released on Wednesday, suggested caution towards a near-term increase in interest rates.

Spot gold was up 0.3% at $1,160.96 an ounce at 3:10 p.m. EDT (1910 GMT), up from Wednesday's four-month low at $1,146.75, just a few dollars from its low for the year, a key support level. US gold futures for August delivery settled down 0.4% at $1,159.20.

"That is anemic performance. It's attracting very little demand," said Bill O'Neill, co-founder of commodities investment firm LOGIC Advisors in New Jersey.

"There's no compelling reason to really get into these markets and there are doubts on the demand side, and that's the worst thing that can happen to these markets."

Gold has been weighed down by expectations the Fed will raise US interest rates for the first time in nearly a decade, lifting the opportunity cost of holding non-yielding gold while boosting the dollar.

"Commodities got something of a lift late yesterday as the dollar dropped back on the Fed's 'lower for longer' stance, and the upwards momentum appears to have carried through today despite the dollar paring back some losses," Jonathan Butler, an analyst at Mitsubishi Corp, said.

"Today was a rare 'up' day on the Shanghai Commodities Exchange, perhaps the government's interventions are starting to pay off." Commodities across the board were lifted by a rebound in battered Chinese stocks, after China's securities regulator took measures to halt a plunge in stock prices.

Traders are also awaiting news on Greece, after European Central Bank President Mario Draghi voiced doubts about the chances of rescuing the country from bankruptcy.

Among other metals, spot silver was up 1.8% at $15.40 an ounce.

Palladium was down 2.5% at $634.72 an ounce after slipping overnight to its weakest since June 2013.

Platinum was down 0.7% at $1,022.50 an ounce after falling on Wednesday to its lowest since February 2009.

The gold-to-platinum ratio rose for the fifth straight session to 1.14 ounces, the highest since August 2012. The palladium and platinum markets remain technically weak.- Reuters

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