Gold futures capped the longest rally in more than six months as Switzerland™s decision to decouple its currency from the euro roiled currency markets, boosting demand for the metal as a haven.
The Swiss National Bank unexpectedly scrapped its three-year policy of capping the Swiss franc against the euro, one week before European policy makers meet to discuss new stimulus. The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, fell for a second day, fueling demand for bullion as an alternative asset.
Gold has risen 6.8 percent this year as signs of deflation and cooling global economic growth spur speculation that the Federal Reserve will be slow to raise U.S. interest rates. Demand for the metal will rebound in 2015 after two straight annual declines as consumption in Asia advances and investors return to exchange-traded products backed by bullion, according to HSBC Securities (USA) Inc.
Gold futures for February delivery surged 2.5 percent to settle at $1,264.80 an ounce at 1:44 p.m. on the Comex in New York, after touching $1,267.20, the highest since Sept. 8. Prices gained for a fifth straight session, the longest rally since June 25.