Gold rebounded more than 2.5 percent after falling to two-year lows and oil cut losses following another sell-off on Tuesday, although shares dropped for a third day as worries over the health of the global economy prevailed. The broad rout in commodities and stocks seen in recent sessions has been triggered by weak data from China and the United States that have sparked fresh concerns about the strength of the global economy’s recovery, reuters.com informs.
A closely watched survey of German economic sentiment added to the worries after the euro zone crisis and economic weakness were blamed for a larger-than-expected drop in confidence in Europe’s biggest economy. MSCI’s global share index, which tracks around 9,000 stocks in 45 countries, was down almost flat ahead of the restart of trading on Wall Street, having been almost 0.5 percent lower earlier in the day. According to independent.ie, gold, which has dominated market attention in recent days, was hovering 2.6 percent higher at USD 1,386.15 an ounce as the near-vertical USD 230 drop in the past two sessions lured back buyers. Other precious metals such as platinum and palladium also bounced back along with copper, while silver snapped a four-day losing streak.Gold’s recovery comes a day after it shed USD 125 an ounce, its biggest ever daily drop.
It has now fallen about 20 percent this year after an unbroken 12 years of gains and is some 28 percent down from the September 2011 record high of USD 1,920.30.Oil, another key commodity that has been caught up in the sell-off, also stabilized.It had fallen below USD 100 a barrel for the first time in nine months in Asian trading before the rout eased and before a major 7.8 magnitude earthquake in oil exporter Iran triggered additional buying to leave it at USD 100.13.