Gold rises as sliding stocks boost safe-haven demand
Gold prices rose on Thursday, helped by a weaker dollar and as a relief recovery in stock markets fizzled out, driving investors toward the safe-haven metal.
Spot gold was 0.4 percent higher at $1,272 per ounce at 10:00 a.m. EST (1500 GMT), after hitting at $1,279.06 in the previous session, its highest since June 19. U.S. gold futures rose 0.1 percent to $1,274.50 per ounce.
"The weaker dollar index is supporting the buying interest in gold and the U.S. stock indexes have pulled back significantly, which has also helped," Jim Wyckoff, senior analyst at Kitco Metals.
"Also, the technical pasture of the gold market has become significantly bullish on a near-term basis, which is inviting some chart-based buying too."
A global equity rally fueled by a dramatic surge on Wall Street ran out of steam on Thursday, after a fall in Chinese industrial profits again showed the pressures on the global economy. U.S. stocks fell sharply at open on Thursday.
"The recovery rally in stocks has not lasted long and the bearish sentiment is dominating again, which is supportive for gold," a Germany-based analyst said.
The dollar index, a gauge of the greenback`s value against six major peers, fell 0.5 percent on Thursday, a sign that gold is cheaper for holders of other currencies. A partial U.S. government shutdown was widely expected to continue after Congress reconvenes on Jan. 3, with lawmakers split over President Donald Trump`s demand for $5 billion in taxpayer funding for a Mexican border wall.
Investor confidence in bullion was reflected in a surge in the holdings of SPDR Gold, the largest exchange traded fund. SPDR holdings rose 2.1 percent on Wednesday, the best one-day percentage gain since July 2016.
"There has been an extensive surge in the gold exchange traded fund holdings and there is absolutely no shortage of momentum there. Investors are just preparing themselves by buying gold as there are several uncertainties heading into 2019," said Naeem Aslam, chief market analyst at Think Markets UK.
SPDR holdings, at their highest since August, have risen about 8 percent since touching more than 2-1/2-year lows in October.
Among other metals, silver was up 1 percent at $15.18 per ounce, after hitting its highest level since mid-August at $15.25. Platinum fell 1 percent to $789.90 per ounce, while palladium was steady at $1,254.99.
(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.