BENGALURU: Gold rose on Thursday as recent weakness tempted some price-sensitive buyers back to the market and a retreat on stock markets sparked some safe-haven demand.
Spot gold was up 0.5 per cent at $1,203.01 an ounce by 1256GMT, having traded in a narrow $34 range for more than a month. US gold futures were 0.3pc higher at $1,206.80 an ounce.
Gold has fallen more than 12pc since hitting a peak in April, under pressure from a stronger dollar that has been boosted by a vibrant US economy, rising interest rates and fears of a global trade war.
“The move shows signs of gold strength,” said Commerzbank analyst Carsten Fritsch. “The metal has fallen too much to a level that cannot be justified by fundamentals.”
Appetite for gold at lower prices helped gold shrug off a surge in US Treasury yields to their highest since mid-2011, pulling global bond yields higher and supporting the dollar near six-week highs. Equities sagged in response.
Kitco Metals senior analyst Jim Wyckoff said some investors had turned to gold as a safe haven over inflation concerns. Gold is often used as a hedge against inflation risk. But he said Thursday’s gains were mainly on technical buying.
“There is some balance with central banks buying gold quietly and individual investors and hedge funds trying to sell gold,” Hussein Sayed, chief market strategist at FXTM.
Among other metals, spot silver was up 0.8pc at $14.70. Palladium was 0.1pc higher at $1,056.72, while platinum rose 0.5pc to $825.80.
Published in Dawn, October 5th, 2018
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