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Gold ends up on IMF forecast, soft German data

AP

Gold ended higher on Tuesday as its safe-haven appeal increased after the International Monetary Fund cut its global economic growth forecasts and weak German industrial data stoked further growth concerns.

Bullion climbed as global equities and the dollar fell after the IMF warned of weaker growth in core euro zone countries, Japan and big emerging markets like Brazil.

Gold posted a sharp reversal on Monday as the dollar's sharp retreat sparked fresh physical demand and short covering after bullion earlier hit a 15-month low.

"Following yesterday's rally, traders are in a wait-and-see attitude now after the IMF lowered world growth and issued some market risk warnings," said George Gero, vice president at RBC Capital Markets.

Spot gold was last up 0.3 percent at $1,211 an ounce. It jumped 1.3 percent on Monday in its biggest one-day gain in two months.

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A four-year high in the dollar index driven by a strong U.S. economic outlook sent gold near four-year low at $1,180 an ounce last week.

Symbol
Name
Price
 
Change
%Change
Volume
GOLD
---
Gold / US Dollar Spot
---
SILV/USD
---
SILVER
---
PALL/USD
---
PLAT/USD
---

U.S. gold futures for December delivery settled $5.10 higher at $1,212.40 an ounce.

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Also underpinning gold was a far more-than-expected drop in German industrial output in August, when it posted its biggest decline since the financial crisis in early 2009.

In the retail gold market, private investor sentiment toward the metal in September climbed as bullion's drop below $1,200 an ounce triggered renewed demand, according to a survey by online precious metals market BullionVault.