Zimpapers Logo

MANILA. — Gold hovered near its weakest level since early 2010 yesterday, reflecting investor hesitation to bid up bullion amid the growing expectation of a near-term hike in US interest rates. The Federal Reserve begins a two-day meeting later in the day where policy makers are likely to signal that a rate hike later in the year is certain as the US economy strengthens.

A further tumble in Chinese equities after their deepest rout since 2007 on Monday has barely affected trading in gold, typically seen as a safe-haven metal.

“If anything it’s a little bit surprising that we haven’t had the safe-haven bid in gold even though you’ve had these big risk-off moves in the Chinese equity market,” ANZ Bank commodity strategist Victor Thianpiriya said in Singapore.

Spot gold was flat at $1 094,40 per ounce by 2.51am GMT. Bullion fell to as low as $1 077 on Friday, its cheapest since February 2010, stretching its losing run to a fifth week.

The earlier rout in Chinese stocks in July as well the Greek debt crisis had failed to spark any safe-haven bid for gold, with investors largely focused on a looming US rate hike. That has strengthened the dollar and dimmed the appeal of noninterest-bearing assets such as bullion. — Reuters.