By Ranjeetha Pakiam and David Stringer
(Bloomberg) — Gold rallied for an eighth straight day after topping $1,200 an ounce for the first time since June as increased concern about the state of the global economy hurt equity markets and boosted demand for a haven. Producers’ shares rallied.
Bullion for immediate delivery rose as much as 0.5 percent to $1,195.66 and traded at $1,192.73 at 12:01 p.m. in Singapore, according to Bloomberg generic pricing. The metal jumped to $1,200.97 on Monday, the highest since June 22, and a climb on Tuesday would cap the longest run of gains since 2011.
Gold has advanced 12 percent this year on rising concern the global economy is losing steam, with equity markets in retreat and investors cutting bets on higher U.S. interest rates. Shares in Asia fell following a drop in U.S. and European stocks on Monday as Deutsche Bank AG became the largest lender in at least four years to feel compelled to reassure investors that it has enough cash to pay its debts.
“Escalating and a more-widespread global financial uncertainty, sparked by heightened investors’ risk-off sentiment, has sustained the sell-offs of major stocks,” Vyanne Lai, an economist at National Australia Bank Ltd. in Melbourne, said by e-mail on Tuesday. That’s driving stronger demand for safe-haven assets including gold, she said.
The global slowdown, including the deceleration in China, has increased speculation that U.S. growth will cool enough to force Federal Reserve policy makers to wait longer before raising rates again. The prospect of delays has sent the dollar lower and given gold a boost as an alternative investment after three years of losses.
Bullion holdings in exchange-traded products have climbed for 15 consecutive days to Friday, the longest run since September 2012, according to data compiled by Bloomberg. The assets expanded 2.6 percent to 1,555.4 metric tons last week for the biggest weekly increase since May 2010.
