By Luzi-Ann Javier and Eddie Van Der Walt
Gold posted the biggest gain in two weeks as equities and the dollar declined, drawing demand from investors who looked past speculation U.S. interest rates will rise this year.
U.S. stocks retreated from a record high, while the Bloomberg Dollar Spot Index fell for a third straight session, helping push crude oil to a one-month high. The odds of an interest-rate increase by December slipped to 49 percent, from 51 percent earlier on Tuesday after the release of reports showing U.S. factory production increased in July while home construction unexpectedly accelerated to the fastest pace in five months.
“Crude rallying back towards highs and the U.S. dollar drifting back lower has restored this morning’s bullish sentiment,” Tai Wong, the director of commodity products trading at BMO Capital Markets in New York, said in an e-mail.
Gold futures have climbed 28 percent this year on speculation the Fed will be slow to raise rates. While New York Fed President William Dudley told Fox Business Network that rates could rise as soon as next month, Fed funds futures data show the market is unconvinced, with the odds staying below 50 percent until February.