Gold price holds above $1,500 on global growth worries
Singapore (Aug 12) Gold edged up on August 12, holding above the psychological $1,500 level, amid concerns over slowing global economic growth as the trade war between Washington and Beijing drags on.
Spot gold was up 0.4% at $1,502.69 per ounce at 0924 GMT, while US gold futures were also up 0.4% at $1,514.10 an ounce.
"Gold is trying to rebound due to fears of slowdown in the global economy and the trade talks (between the United States and China) are not going in the best ways," ActivTrades analyst Carlo Alberto De Casa said, adding the "rebound in stock markets is weak and there is still room for gold to go up."
In the latest development in the long drawn dispute between the world's biggest economies, US President Donald Trump said on Friday he was not ready to make a deal with China and even called the September round of trade talks into question.
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European stocks were expected to recover on Monday after a second week of losses. In early deals, futures for the pan-region Euro Stoxx 50 were up 0.69%, German's DAX was 0.6% higher and the FTSE up 0.58%.
"To achieve higher (gold) prices we need more negative surprises in the economic, financial and geopolitical side. If we don't see further escalation (in trade tensions), we are likely to see gold prices treading water or come under more pressure," Commerzbank analyst Eugen Weinberg said.
Meanwhile, Goldman Sachs said on Sunday that fears of the trade war leading to a recession were increasing and that it no longer expected a trade deal between Washington and Beijing before the 2020 US presidential election.
Analysts also said dovish central banks and negative debt yields around the globe were further supporting bullion.
Gold prices rose as much as 4% last week and are up about 17% this year.
Market focus is now on the Federal Reserve annual symposium at Jackson Hole later in the week, with investors seeking greater clarity on the future path of interest rates. Traders see a 69% chance of a 25 basis-point rate cut by the US central bank this September.
Hedge funds and money managers raised their bullish stance in COMEX gold and trimmed net long positions in silver contracts in the week to Aug. 6, the US Commodity Futures Trading Commission (CFTC) said on Friday.
Among other precious metals, silver gained 0.3% to $16.99 per ounce. Platinum was down 0.4% at $855.87, while palladium rose 0.4% to $1,427.64 an ounce.
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