Gold prices extend gain on global recession fears, Sino-US tensions


By Ashitha Shivaprasad


(Reuters) – Gold rose for fifth straight session on Tuesday to its highest level in about a month as Sino-U.S. tensions and fears of a possible burnished the metal’s safe-haven appeal.


Spot gold was up 0.3% at $1,777.79 per ounce by 10:56 a.m. ET (1456 GMT). U.S. gold futures gained 0.6% to $1,795.90.


Expectations of toned down rate hikes and a clear slowdown in the economy have significantly supported gold, said David Meger, director of metals trading at High Ridge Futures.


“Dollar rallied amidst Fed (Federal Reserve) rate hike expectations and since expectations have been muted slightly, dollar strength is going to wane a bit in the near term, allowing some support in the gold market,” Meger added. [USD/]


Gold is considered as a safe store of value during economic and geo-political uncertainties and typically does well during times of low or zero interest rates.


While recent economic data has raised bets that U.S. interest rates could peak early next year, San Francisco Fed President President Mary Daly said the central bank’s work of bringing down inflation is “nowhere near” almost done.


Daly added that Fed officials are “still resolute and completely united” in the task of achieving price stability.


The central bank last month raised its benchmark interest rate by three-quarters of a percentage point for a second straight meeting.


Gold’s rise on Tuesday was also supported by the risk-off sentiment due to rising U.S.- tensions, TD Securities said in a note.


The tensions sparked by the arrival in Taipei of U.S. House of Representatives Speaker Nancy Pelosi pushed Wall Street lower. [.N]


Spot silver was 0.6% lower at $20.22 per ounce.


Platinum fell 0.1% to $905.35, while palladium fell 6% to $2,060.92.


 


(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Aditya Soni)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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