Gold rises as U.S. bond stocks warn of recession risks

Gold inched up on Thursday as an inverted U.S. bond yield curve alarmed investors about rising recession risks, while the protracted Sino-U.S. trade war added to fears of a global economic slowdown, increasing the appeal for safe-haven assets.

Spot gold was up 0.3 percent at $1,520.19 per ounce at 0100 GMT.

U.S. gold futures fell 0.1 percent to $1,526.80 an ounce.

The U.S. Treasury yield curve temporarily inverted on Wednesday for the first time since 2007, an indication that is widely seen by investors as a sign of an upcoming U.S. recession.

Economic data from China and Germany suggested a slowing global economy, hit by the unabating U.S.-China trade war, Brexit and geopolitical tensions.

On Wednesday, U.S. officials said China has made no trade concessions after U.S. President Donald Trump postponed the ten percent tariffs on over $150 billion worth of Chinese imports, the latest sign that efforts to reach a trade deal were going nowhere.

The MSCI All Country World Price index, which incorporates readings of 49 equity markets across the world, shed 2.1 percent to its lowest level since June 4.

The dollar index, which measures its value against a basket of six major currencies, was little changed after a 0.2 percent gain on Wednesday.

Investors are focused on the Federal Reserve’s annual symposium next week. Traders see an about 74 percent chance of a 25 basis-point rate cut by the Fed this September.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.91 percent to 844.29 tonnes on Wednesday.

Source: Reuters