Gold climbed above $1,100 an ounce for the first time in nine weeks on Thursday as investors channeled money into the safe-haven metal amid a global stock market rout.
The shift is due to worries over the Chinese economy and heightened geopolitical tensions.
China stocks fell 7 per cent 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 per cent at $1,099.32.
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.
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