Gold extends gains, buoyed by Indian festival demand

Gold prices extended gains on Wednesday after touching nearly 3-week highs in the previous session, buoyed by rising physical demand ahead of India’s late-October festival season.

Spot gold was up about 0.1 percent at $1274.76 an ounce at 0054 GMT. It hit its strongest since Oct. 5 on Tuesday at $1,276.67.

U.S. gold futures rose nearly 0.2 percent to $1275.70 an ounce.

Gold is a traditional gift during two of the most important Hindu festivals, Dhanteras and Diwali, which will be celebrated at the end of the month.

U.S. stocks fell on disappointing earnings reports on Tuesday, while the U.S. dollar slipped from multi-month highs after Bank of England Governor Mark Carney cast doubt on expectations for more monetary stimulus.

The European Central Bank is aware of the growing costs to the financial sector of its ultra-loose monetary policy and would rather not have to keep negative interest rates for too long, ECB President Mario Draghi said on Tuesday.

A potential U.S. interest rate hike in December will have limited impact on the yuan, the People’s Bank of China chief economist Ma Jun told reporters on Tuesday.

U.S. home prices rose 5.1 percent in the year to August as home buyers competed for fewer properties, helped by low mortgage interest rates, some wage growth and low unemployment.

Russia and Kazakhstan continued to boost their gold reserves in September, data from the International Monetary Fund showed on Tuesday.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.34 percent to 956.83 tonnes on Tuesday from 953.56 tonnes on Monday.

Source: CNBC

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