Gold Steady Near Six-Year High On Growing Recession Fears
Spot gold slipped 0.2 per cent to $1,543.02 per ounce at 0407 GMT, but near last week's $1,554.56, its highest since April 2013.
Photo Credit : Reuters
Gold held steady on Wednesday after rising 1% in the previous session, with prices hovering near a more than six-year high on heightened fears of a global recession following weak U.S. data, the prolonged Sino-U.S. trade spat and Brexit uncertainties.
Spot gold slipped 0.2% to $1,543.02 per ounce at 0407 GMT, but near last week's $1,554.56, its highest since April 2013.
U.S. gold futures were also down 0.2% at $1,552.4 an ounce.
Spot silver was up 0.7% to $19.37 per ounce, after hitting $19.57 earlier, its highest since September 2016.
With no agreement on the U.S.-China trade front, investors remain nervous, said Michael McCarthy, chief market strategist at CMC Markets, adding that uncertainties following a parliamentary vote in the UK are a positive for gold.
British lawmakers defeated Boris Johnson in parliament on Tuesday in a bid to prevent him taking the country out of the EU without a divorce agreement, prompting the prime minister to announce that he would immediately push for a snap election.
Adding to gold's safe-haven appeal was U.S. manufacturing data that showed activity contracted for the first time in three years last month and President Donald Trump's threat that he would be "tougher" on Beijing in a second term if trade talks dragged on.
"Rising U.S. rate cut expectations over lacklustre economic data will boost bullion appeal as traders ease up on U.S. dollar strength," Phillip Futures analyst Benjamin Lu said in a note.
Traders have almost fully priced in a 25 basis point interest rate cut at the Federal Reserve's meeting later this month, according to CME's FedWatch tool.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar.
The dollar index was down 0.1% against a basket of currencies, while Asian stocks bounced led by Chinese markets after a report showed growth in the country's service sector accelerating despite broader economic headwinds.
Spot gold faces a resistance at $1,546 per ounce, a break above which could lead to a gain into the range of $1,568-$1,595, according to Reuters technical analyst Wang Tao.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 1.34% to 890.04 tonnes on Tuesday.
Elsewhere, spot platinum dipped 0.2% to $956.04 per ounce and palladium was down 0.3% at $1,537.50.