Gold Holds Gain on Demand for Haven to Head for Monthly Advance

Gold held the biggest advance in a week on concern that a rout in emerging-market assets may deepen, fueling demand for a haven as the U.S. Federal Reserve further reduced the pace of asset purchases.

Bullion for immediate delivery traded at $1,266.27 an ounce at 8:07 a.m. in Singapore from $1,267.24 yesterday, when prices climbed 0.8 percent, the most since Jan. 23. The metal is headed for the first monthly advance since August as stocks and currencies from India to South Africa slumped. The Federal Open Market Committee said yesterday that it will cut monthly bond-buying by $10 billion to $65 billion, trimming purchases for a second straight month, as the U.S. economy improved. Central banks from India to Turkey and South Africa raised borrowing costs this week to try to stem capital outflows amid concern that China’s economy is slowing. Increased physical demand in Asia has helped gold rebound from a six-month low on Dec. 31, when prices capped the biggest annual decline since 1981. This support is waning just before the Lunar New Year, which begins tomorrow, according to Australia & New Zealand Banking Group Ltd. Volumes for the benchmark contract on the Shanghai Gold Exchange fell for a fourth day yesterday to the lowest level this year. Copy Source : Bloomberg