Gold price hits over 6-month high as investors flock to safety

London (Dec 28)  Gold climbed to a more than six-month high on Friday, as concerns about slowing global economic growth and a partial government shutdown in the United States stoked safe-haven demand, although gains in equities capped the upside.

Spot gold had risen by 0.5 percent to $1,281.08 per ounce as of 0713 GMT, and was set for a second straight weekly gain with no end in sight for China-U.S. trade tensions and political uncertainty in the United States.

The precious metal hit its highest level since June 19 at $1,281.39 earlier in the session.

U.S. gold futures inched up 0.2 percent to $1,283.2 per ounce on Friday.

"People see gold as the only safe haven at this point of time," said Brian Lan, managing director at dealer GoldSilver Central in Singapore, referring to political and economic upheavals such as the Sino-U.S. trade spat and the partial U.S. government shutdown.

The dollar index, a gauge of its value versus six major peers, edged lower, having lost 0.5 percent overnight, adding to gold's appeal by making it cheaper for holders of other currencies.

Financial markets are expecting U.S. growth to slow next year as a result of rising interest rates. A measure of U.S. consumer confidence posted its sharpest decline in more than three years in December, emphasizing the possibility.

In a blow to worsening trade tensions between the world's two biggest economies, U.S. President Donald Trump is considering an executive order that would bar U.S. companies from using telecommunications equipment made by China's Huawei and ZTE.

Gold is often used by investors as a hedge against political and financial uncertainty.

Meanwhile, Asian stocks inched higher after Wall Street ended volatile trade in the green in the previous session, limiting gold's advance.

FoxBusiness

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