Gold rises for second day as US rate hike expectations cool

Gold rises for second day as US rate hike expectations cool
US gold rose 0.3% to $1,351 an ounce. Representational Image. Image Source: Reuters
By Reuters
Updated: Tue, Aug 16, 2016
08:58 am
Reuters
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Gold rose for a second day on Tuesday on lower expectations that the US Federal Reserve will raise interest rates this year due to mixed macro economic signals from the world's largest economy.

Fundamentals

* Spot gold was up 0.5% at $1,345.68 an ounce at 0100 GMT. The metal rose 0.2% on Monday.

* US gold rose 0.3% to $1,351 an ounce.

* The greenback was put on the defensive after weaker-than-expected US data on Friday dented prospects of a near-term rate hike by the Fed.

* Central bankers and governments must come up with new policies to buffer their economies against persistently low interest rates that threaten to make future recessions deeper and more difficult to avoid, San Francisco Fed President John Williams said.

* The Bank of Japan's (BoJ) policy review could put up for debate its target for expanding base money through massive asset purchases.

* British employers have turned more cautious about hiring and the price of homes for sale fell by the most since late 2015, according to surveys that added to signs the economy has stumbled since the Brexit referendum.

* Soros Fund Management LLC sharply cut its shares in gold in the second quarter, when bullion prices rose to two-year highs, regulatory filings with the US Securities and Exchange Commission showed on Monday.

* New York-based Paulson & Co, led by John Paulson, kept its stake in SPDR Gold Trust unchanged in the second quarter at 4.78 million shares worth $603.9 million.

* Jana Partners dissolved its share stake in the world`s biggest gold exchange-traded fund (ETF) in the second quarter of 2016 as bullion prices rose to two-year highs, US Securities and Exchange Commission filings showed on Monday.

Market Report

* Asian shares rose to one-year highs, extending their gains so far this year to almost 10%, helped by a jump in oil prices and investor expectations of continued easy monetary policy around the globe.

Data Ahead

0830 (GMT) Britain Consumer prices July 0900 Germany ZEW economic sentiment August 1230 US Consumer prices July 1230 U.S. Housing starts July 1230 US Building permits July 1315 US Industrial output July.