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Gold keeps rising as safe haven demand returns

Gold is looking to extend its winning streak to seven sessions today, rising yet again after a disappointing jobless claims update sent equity markets in Europe and the US south.

The yellow metals’ gains were minor, barely putting it above US$1,196/oz one day after testing support at US$1,200/oz on increased physical buying and optimism that China’s decision to loosen up its domestic gold market would lead to a rise in demand. Heavy buying from Indian jewellers ahead of the festival season in that country coupled with continuingly strong demand from bargain hunters further bolstered gold.

The safe haven status of gold looked more attractive today after an update on US jobless claims showed an increase of 19,000 in initial claims to 479,000, while continuing claims declined by 34,000 to 4,537,000, which, however, was not enough to offset the rise in initial benefit claims.

Futures for the Dow Jones Industrial Average were down 0.4%, while the FTSE 100 retreated after making gains in early trade.

Gold inched higher to US$1,196/oz. Silver followed, climbing to US$18.37/oz, while platinum declined to US$1,574/oz.