LONDON: Gold rose on Thursday as renewed weakness in global stock markets spurred investors to seek refuge in bullion, which has also been helped by an improved technical outlook.
Spot gold rose 0.4 per cent to $1,227.04 per ounce at 1:18 pm EDT. US gold futures were up 0.2pc at $1,230.10. “Renewed weakness in equity markets might trigger additional buying in gold,” said Alexander Zumpfe, a precious metals trader at Heraeus. “Gold continues to look well supported by short-covering and fresh buying after it recently installed a short-term uptrend. We continue to see good physical demand on every price dip,” he added.
US stocks fell on Thursday as weak earnings reports from industrials raised worries over rising expenses and the impact of tariffs, adding to concerns of higher borrowing costs after hawkish commentary in the Federal Reserve’s minutes. “Overall, we have been technically breaking above the previous highs, so it will be difficult for gold prices to move below that,” said ABN AMRO analyst Georgette Boele. The global stock market sell-off on Monday boosted gold’s appeal, helping the yellow metal to a 2-1/2-month peak of $1,233.26. A rise above the 100-day moving average, around $1,226, was also supporting gold with some analysts saying a clear break above that level could trigger further gains and put further pressure on short-sellers.
In other precious metals trading, silver was down 0.2pc at $14.58 per ounce, having earlier touched its lowest since October 11 at $14.41. Platinum fell 0.7pc to $825.49 after hitting a one-week low of $821, while palladium gained 0.5pc to $1,074.70.
Published in Dawn, October 19th, 2018