Gold rebounds from 3-day slide

LONDON: Gold rose on Wednesday ahead of minutes of the US Federal Reserve’s latest meeting, snapping three days of losses, as expectations that US interest rates will stay lower for longer sharpened appetite for the metal.
Gains were limited, however, as stock markets rallied, with rising equities on both sides of the Atlantic pointing to a retreat in the risk aversion that drove gold prices to one-year highs last week.
Spot gold was at $1,210.57 an ounce at 1445 GMT, up 0.9 percent, while US gold futures for April delivery were up 0.2 percent at $1,210.80.
Silver was up 0.6 percent at $15.32 an ounce, while platinum was up 1.6 percent at $942 an ounce and palladium was up 1.2 percent at $510.15 an ounce.
Gold peaked at $1,260.60 an ounce last week and has rallied nearly 14 percent since the start of the year, driven largely by expectations that wider market volatility will lead the Federal Reserve to take a cautious attitude to further rate hikes.
“The Fed rate hike most likely won’t happen in March, and that for me is the most important driver behind the price of gold,” Natixis analyst Bernard Dahdah said.
“Even if the wider markets improve slightly, as we’ve seen in the last few days, if people still believe the rate hike won’t take place in March it will be hard to see gold prices continuing a downward movement. That’s why it’s sticking at the levels we’ve seen today.”
Speculation has increased in recent days that the US central bank might resort to negative interest rates to stimulate the economy after Fed Chair Janet Yellen said last week it was an option.
Ultra-low rates, which cut the opportunity cost of holding non-yielding gold, were a key factor driving prices to record highs in 2011.