Gold rises on safe-haven demand amid global growth concerns
Gold rose on Wednesday on demand for safer investments amid falling equity markets and concerns over the outlook for global economic growth.
Spot gold rose 0.1 percent to $1,283.61 an ounce as of 0452 GMT, near a six-month high of $1,284.09 reached on Monday.
U.S. gold futures rose 0.3 percent to $1,284.80 per ounce.
“It looks very optimistic and fundamentally supportive for gold as the overall mood is still very uncertain and the market confidence is still weak on global growth worries,” said Benjamin Lu Jiaxuan, commodities analyst at Singapore-based brokerage firm Phillip Futures.
Asian shares turned tail on the first trading day of the new year as more disappointing economic data from China, the world’s second-largest economy, darkened the mood and erased early gains in U.S. stock futures.
The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) for December fell to 49.7, from 50.2 in November, and followed a raft of soft trade data from the Asian region.
Markets were looking for views from Federal Reserve Chairman Jerome Powell on the U.S. economic outlook and hints about rate hikes in 2019 when he participates in a joint discussion with former Fed chairs Janet Yellen and Ben Bernanke on Friday.
Also looming are a closely-watched survey on U.S. manufacturing due on Thursday, followed by the December payrolls report on Friday.
There are expectations that a three-year rate-hiking cycle in the United States has come to a close. Markets currently expect no rate hikes next year.
A halt in interest rate increases would be beneficial for non-interest bearing bullion.
“Trade concerns, Brexit and the U.S. Government shutdown continue to provide support to precious prices, with $1,300 acting as the major top-side resistance for gold,” MKS PAMP Group said in a trade note.
U.S. President Donald Trump said on Saturday that he had a “long and very good call” with his Chinese counterpart Xi Jinping and that a possible trade deal between the United States and China was progressing well.
Among the other precious metals, palladium gained 0.08 percent to $1,264.99 per ounce.
Silver was down 0.5 percent to $15.36 an ounce while platinum was flat at $791.50.
Source: Reuters
