Gold prices rise

03 Jul, 2019 - 00:07 0 Views
Gold prices rise

The Herald

Gold prices rose yesterday, after its biggest one-day percentage fall in 2-1/2 years the previous session, as risk appetite soured on worries over global growth and uncertainties around a Sino-US trade deal.

Spot gold was up 0,63 percent at $1,392.7 per ounce, after falling 1.8 percent  on Monday, its biggest one-day percentage decline since November 2016. US gold futures were up 0,40 percent at $1,394.9 an ounce.

President Donald Trump said on Monday that any trade deal with China would need to be “somewhat tilted” in favour of the United States. The US government also threatened tariffs on $4 billion of additional European Union goods in a long-running dispute over aircraft subsidies.

“The trade fiasco could be a positive factor for gold as the deal is still not reached yet… The stock markets are in red, which is another positive thing for gold,” said Carlo Alberto De Casa, chief analyst with ActivTrades.

Data showed manufacturing activity slowed last month, weakening appetite for risk. Factory activity shrank across much of Europe and Asia in June, while growth in manufacturing cooled in the United States, keeping the world’s monetary policymakers under pressure to avert a recession.

“The support level $1,380 was able to push up prices despite the correction. As far as we hold $1,380, the trend appears positive despite the big correction,” De Casa said.

“Investors are still confident that the U.S. Federal Reserve will cut rates in the next few months. As far as that holds we can see gold rise above $1,400.”

Gold prices hit a six-year high last week at $1,438.63 an ounce, driven by a dovish outlook from major central banks and an escalation of tensions between the United States and Iran.

The market will now focus on U.S. non-farm payrolls data due on Friday, which should help investors better assess whether the Federal Reserve will cut interest rates later this month.

“Upcoming US economic numbers and Federal Reserve speakers’ comments are critical as we approach the Federal Open Market Committee meeting at the end of July,” UBS analysts said in a note. — Reuters.

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