Gold rose a second day, extending a rebound from a three-month low, on speculation that economic risks from China and Greece will prompt the Federal Reserve to delay raising U.S. interest rates.
All but one member of the Federal Open Market Committee “indicated that they would need to see more evidence that economic growth was sufficiently strong” before raising rates, Fed minutes released Wednesday showed. Higher rates curb bullion’s appeal because it doesn’t pay interest or give returns like other assets such as bonds and equities.
Gold dropped in the past four quarters, the longest slump since 1997, on the prospect of higher rates. The minutes showed Fed concerns that turbulence overseas poses a risk for U.S. expansion. The International Monetary Fund on Thursday cut its forecast for global growth in 2015.
Gold for immediate delivery rose 0.6 percent to $1,165.72 an ounce by 9:57 a.m. in New York. Prices climbed 0.3 percent on Wednesday after touching $1,147.36, the lowest since March 18.
The IMF in cutting its forecast cited a weaker first quarter in the U.S. and warned that financial-market turmoil from China to Greece clouds the outlook. Chinese stocks have tumbled in recent weeks, and Greece is struggling to reach a deal with European creditors to stay in the euro area.