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PRECIOUS-Flight to safety sends gold to 9-wk high as stocks slump
January 7, 2016 / 3:24 AM / in 2 years

PRECIOUS-Flight to safety sends gold to 9-wk high as stocks slump

* Spot gold, U.S. futures climb above $1,100/oz
    * China shares slip 7 pct, Asian shares at 3-month low
    * Equities decline to keep gold supported

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, Jan 7 (Reuters) - Gold climbed above $1,100 an
ounce for the first time in nine weeks on Thursday as investors
channelled money into the safe-haven metal amid a global stock
market rout, worries over the Chinese economy and heightened
geopolitical tensions. 
    China stocks fell 7 percent on Thursday after less
than half an hour of trading, triggering a circuit breaker that
suspended trading for the rest of the day.
    China also guided the yuan sharply lower, deepening  
concerns about the economy and sending Asian shares to a
three-month low. 
    Spot gold rose to a nine-week high of $1,102.80 an
ounce, before paring some gains to trade up 0.5 percent at
$1,099.32 by 0644 GMT. U.S. gold futures also jumped for a
fourth straight session to a nine-week high of $1,102.50.
    "Gold continued to climb with rising safe-haven demand amid
the rebound in market volatility. Rising equities losses and
surprising devaluation of the yuan are painting a positive
picture for gold," ANZ said.
    Gold, often seen as an alternative investment during times
of geopolitical and financial uncertainty, benefited from the
risk-averse sentiment in the market along with other haven
assets such as the Japanese yen and U.S. Treasuries.
    "Gold is clearly re-establishing its role as a safe-haven. 
For as long as global stock markets - in particular China's -
appear wobbly, gold is likely to attract a good bid," HSBC
analyst James Steel said.
    A raft of data releases from China in coming weeks is likely
to show activity continuing to slow, adding to global concerns
about the country's economic outlook for 2016. 
    The World Bank on Wednesday cut its global economic growth
forecast for 2016, citing the weak performance of major emerging
market economies. 
    Adding to market fears was North Korea's announcement it had
successfully tested a powerful nuclear bomb on Wednesday, a move
that escalated tensions in the Korean peninsula. 
    The news came just days after tensions flared in the Middle
East between Saudi Arabia and Iran after Riyadh executed a
Shi'ite cleric critical of Saudi policy. 
    Bullion was also supported by a softer dollar and the
release of the minutes of the Federal Reserve's last policy
meet. The minutes assured markets that the Fed would hike rates
gradually this year. 
    Among other precious metals, silver and platinum
 rose, tracking gold.
    Palladium, which as an autocatalyst metal is more
exposed to economic weakness, slid to a near-5-1/2-year low of
$501 an ounce before paring some losses to trade down 0.9
percent.

    PRICES AT 0644 GMT
 Metal             Last     Change   Pct chg
                                            
 Spot gold         1099.32     5.02     0.46
 Spot silver        14.055    0.055     0.39
 Spot platinum       878.1     2.45     0.28
 Spot palladium     503.45     -4.3    -0.85
 Comex gold         1099.5      7.6      0.7
 Comex silver       14.055    0.079     0.57
                                            
 COMEX gold and silver contracts show the
 most active months
 
 (Reporting by A. Ananthalakshmi; Editing by Joseph Radford and
Biju Dwarakanath)

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