Gold climbed above $1,100 an ounce for the first time in nine weeks on Thursday as the dollar fell and investors channelled money into safer assets for a fourth straight day after worries about the Chinese economy hit global stocks. Shares on major exchanges fell for a sixth consecutive day while crude oil prices bounced back from multiyear lows as volatile markets digested another move lower in the yuan and China's efforts to stabilise its sinking stock market.
"Gold's strength is probably going to be relatively short term, but there is an upside risk to gold, if the view that China is going to pull the whole world into recession becomes stronger," Citigroup metals strategist David Wilson said. Spot gold rose to a nine-week high of $1,109.94 an ounce at one stage and was up 1.3 percent at $1,108.45 an ounce at 2:03 pm EST (1903 GMT). US gold futures settled up 1.5 percent at $1,107.80 an ounce, also a nine-week high.
Palladium, however, which is more exposed to economic weakness because it is used as an autocatalyst metal, slipped to $481.67 an ounce, its lowest since August 2010. It followed weakness in crude oil and industrial metals. Spot platinum dropped 0.3 percent to $873.30 an ounce. Silver rose 2.1 percent to $14.30 an ounce.
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