Gold is starting to regain its luster, thanks to signs that the US economy is starting to sputter.
The metal climbed above its 200-day moving average on Wednesday for the first time in about five months, Bloomberg said.
A gauge of inflation dropped by the most since January and retail sales missed forecasts, increasing the chances that the Federal Reserve will delay raising interest rates until next year.
Gold declines when rates rise because the metal doesn’t pay yields, unlike competing assets, the news agency said.
The odds of a rate rise in December have dropped to 29 percent, from 74 percent just two months ago, futures trading show.
Gold surged 70 percent from December 2008 through June 2011 as the Fed fanned inflation fears by purchasing debt and holding borrowing costs near zero percent in a bid to shore up growth.
The metal’s gain above “the 200-day moving average gives longer-term confidence” to bulls, Frank Holmes, chief investment officer of US Global Investors, told Bloomberg in a phone interview.
“Gold only becomes unattractive when you can’t earn money on it.”
Gold futures for December delivery gained 1.2 percent to settle at US$1,179.80 an ounce on the Commodity Exchange in New York on Wednesday. The 200-day measure is near US$1,176.
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