Gold rose as renewed losses in Asian equities spurred demand for less risky assets, with Citigroup Inc. saying bullion’s rationale as a haven was now back in vogue and prices may be supported over the first quarter.
Bullion for immediate delivery advanced as much as 0.6 percent to $1,093.56 an ounce and was just shy of that level at 12:10 p.m. in Singapore, according to Bloomberg generic pricing. Spot silver also climbed.
The tumultuous start to the year has led investors to seek bullion, boosting prices 3 percent. Asian stocks fell to a three-year low on Wednesday after crude fell below $28 a barrel and the International Monetary Fund cut its world growth outlook amid the slump in most commodities.
“People are still a bit nervous, although I don’t think they should be because I feel that this commodity cycle is starting to position itself quite positively,” Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney, said by phone.
Holdings in gold-backed exchange-traded products climbed for the seventh time in eight days. Assets surged 22.7 metric tons to 1,511.8 tons as of Tuesday, the highest level since Nov. 6, data compiled by Bloomberg show.
“Gold’s safe-haven rationale is back in vogue, for the time being,” Citigroup analysts including Aakash Doshi wrote in a report on Jan. 19, raising the bank’s 2016 forecast 7.5 percent to $1,070. “We expect ongoing global macro concerns to lend support this quarter.”
Bullion of 99.99 percent purity rose 0.2 percent to 231.75 yuan a gram ($1,095.93 an ounce) on the Shanghai Gold Exchange. Spot silver added 0.2 percent, while palladium lost 0.5 percent and platinum dropped 0.4 percent.