Gold climbs towards 2019 highs - GulfToday

Gold climbs towards 2019 highs

Gold

Gold bangles are on display at a jewellery showroom in Mumbai, India. Reuters

Gold prices rose on Thursday, drawing closer to their highest levels this year on increased expectations of a US rate cut, even as some investors locked in profits from bullion’s recent rally.

Spot gold rose 0.5 per cent to $1,336.67 per ounce as of 0947 GMT, while US gold futures gained 0.6 per cent to $1,341.

“Gold’s strength is most certainly based on the prompt change in the market outlook on how aggressively the Fed will cut rates over the coming months,” Saxo Bank commodity strategist Ole Hansen said.

Having suspended a three-year monetary tightening campaign earlier this year, the US Federal reserve is widely expected now to cut rates, especially after comments from Chairman Jerome Powell that the central bank will closely monitor the economic impact of trade conflicts.

Non-yielding gold has risen about $60 an ounce in one week. The metal approached its highest level this year of $1,346.73 in the previous session, climbing to $1,343.86 an ounce before reversing course.

“It seems like some profit-taking has emerged since then. Also, gold has run a long way in its rally in a short span of time, so I would not be surprised to see it consolidate,” Hansen said.

Meanwhile, US President Donald Trump threatened to hit China with tariffs on “at least” another $300 billion of Chinese goods but said he thought China and Mexico wanted to make deals in their trade disputes with the United States.

“Investor indifference towards gold is seemingly thawing, with market participants that have been inactive for some (time) starting to get involved again. We think continuing trade tensions are likely to keep markets uneasy, and therefore keep gold supported,” UBS analysts said in a note.

Reuters