By Kim Kyoungwha
Oct. 29 (Bloomberg) -- Gold rebounded from its lowest level in three weeks after the metal’s decline prompted investors to increase holdings and a drop in equities boosted its appeal as a store of value.
Bullion gained as Asian stocks extended a global drop in equities after new-home sales fell unexpectedly in the U.S., casting doubt over the strength of the recovery there and reviving demand for safer assets. The MSCI Asia Pacific Index of regional shares fell for a third day.
“We did have a fairly strong sell-off overnight,” said Darren Heathcote, head of trading at Investec Bank Ltd. in Sydney. “Probably that’s a short-term bearish move. And, certainly, there’s some safe haven buying.”
Gold for immediate delivery increased 0.4 percent to $1,031.68 at 1:20 p.m. in Singapore after earlier falling to $1,026.60, the lowest since Oct. 6. The precious metal, which fell as much as 1.3 percent yesterday, reached a record $1,070.80 an ounce on Oct. 14.
Stocks fell as the home-sales report reinforced concerns a recovery from the worst recession since the 1930s may cool. An $8,000 tax credit in the U.S. ends in November. Economists say a recovery in housing is a key to rebuilding the confidence and finances of American consumers, whose spending makes up 70 percent of the world’s largest economy.
Among other precious metals, silver rose 0.6 percent to $16.24 an ounce, platinum added 0.5 percent to $1,315.50 an ounce and palladium jumped 0.6 percent to $318 an ounce.
To contact the reporter on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net
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