Gold hits three-week high as global growth fears lift safe-haven appeal
Gold prices rose to a more than three-week high on Monday, helped by a weaker dollar and as worries over global economic growth pushed investors into safe-haven assets.
Spot gold rose 0.7 percent to $1,322.7 an ounce by 1:56 p.m. EDT (1756 GMT), its highest since Feb. 28. Last week it posted its third consecutive weekly gain, rising about 1 percent. U.S. gold futures settled 0.8 percent higher at $1,322.6.
"The dollar has been a bit weaker along with equities. A lot of macro numbers we have been getting have been deteriorating sharply. Central banks, which are already dovish, will be more dovish, which is good for gold," said INTL FCStone analyst Edward Meir.
Equity markets on Monday hit a 12-day low on global economic worries after an inversion in the U.S. bond yield curve on Friday stoked fears that the world`s largest economy was headed for recession, boosting demand for assets such as gold and the yen while denting the dollar.
"Gold, however, has not managed to rally that much in a friendly environment. It is yet to get to 2018 highs, where we had a much better macro environment," Meir said, noting bullion has much more room for an upside given the current market conditions.
Gold has gained more than 13 percent since touching more than 1-1/2 year lows last August, mainly driven by a dovish U.S. Federal Reserve and global growth concerns. But prices are down from a 10-month high hit in February at $1,346.73.
"From our vantage point, we expect gold to head towards our target of $1,364 sooner than anticipated," TD Securities analysts said in a research note.
"While prices have thus far avoided closing above levels that would imply substantial buying, the bar is low for algorithmic trend followers to substantially add to their length above $1,315."
Speculators raised their net long position by 15,971 contracts to 57,746 in COMEX gold in the week to March 19, data showed on Friday.
Holdings in the world`s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose about 1 percent in the previous week.
"We are entering a period of high uncertainty for fundamentals and risk assets and if this were to heighten further, gold could break out substantially, helped by safe- haven flows, lower yields and expectations of a possible return to quantitative easing," Altana Wealth wrote in a note to clients.
Palladium was up 0.8 percent at $1,576.16 an ounce, silver gained 1 percent to $15.56 and platinum was up 1.8 percent at $859.09.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.