BENGALURU: Gold rose on Tuesday as investors unwound some bearish positions after prices jumped to a 2-1/2-month high in the previous session, driven by a global equities sell-off.
Spot gold was up 0.2 per cent at $1,228.36 per ounce at 1214 GMT, having peaked on Monday at $1,233.26, its highest since July 26. US gold futures were up 0.2pc at $1,232.20.
“Gold is still holding the gains, very close to the 100-day moving average. A close above that level could be a positive sign and provoke more short-covering and push prices higher,” said Commerzbank analyst Carsten Fritsch.
Speculators who trade on technical signals regard a break above the 100-day moving average as a bullish sign. Prices were trading above the 100-day moving average of $1,227.
Global equities edged higher after sharp declines over the past couple of days, but gains were capped as markets remained nervous because of factors including the US-China trade tussle, tensions between Saudi Arabia and western powers, stalled Brexit negotiations and concerns over China’s economy.
Gold, usually viewed as a safe store of value during political and economic uncertainty, has fallen nearly 10pc from its April peak as investors largely turned to the dollar as the US-China trade war unfolded against a background of higher US interest rates.
Holdings of SPDR Gold Trust, the largest gold-backed exchange traded fund, rose for a second straight session on Monday, rising 4.1 tonnes. Holdings have gained about 2.5pc in the past seven days, which, some analysts said, is a shift in perception in sentiment among gold ETF investors. SPDR Gold holdings are down about 3.9 million ounces from a peak in April.
In other metals, platinum was up 0.5pc at $842.68 per ounce after touching its highest since July 10 at $850.10 on Monday.
Palladium was flat at $1,084.20 an ounce while silver rose 0.6pc to $14.73 an ounce.
Published in Dawn, October 17th, 2018
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