Gold bounces as global growth worries weigh on equities
By Eileen Soreng (Reuters) - Gold bounced back on Tuesday from multi-week lows touched in the previous session as mounting concerns of an economic slowdown exacerbated by a cut in the International Monetary Fund's global growth forecast drove investors to the safety of bullion. Spot gold was up 0.3 percent at $1,282.80 an ounce at 1323 GMT, recovering from a dip on Monday to its lowest since Dec.
By Eileen Soreng
(Reuters) - Gold bounced back on Tuesday from multi-week lows touched in the previous session as mounting concerns of an economic slowdown exacerbated by a cut in the International Monetary Fund's global growth forecast drove investors to the safety of bullion.
Spot gold was up 0.3 percent at $1,282.80 an ounce at 1323 GMT, recovering from a dip on Monday to its lowest since Dec. 28 at $1,276.31. U.S. gold futures were little changed at $1,282.
"Gold and safe-haven demand are in a stable relationship ... There is a bit of risk-off sentiment," said ABN AMRO analyst Georgette Boele, adding that weakness in European stock markets and lingering doubts surrounding the U.S.-China trade spat were supporting gold.
Pessimism about global growth weighed on equities after the IMF warned of a darkening outlook and China confirmed its slowest growth rate in nearly 30 years.
In its World Economic Outlook report, the IMF predicted that the global economy would grow at 3.5 percent in 2019 and 3.6 percent in 2020, down 0.2 and 0.1 percentage points respectively from last October's forecasts.
Gold held its own against gains in the dollar, with the greenback also sought as a refuge by investors concerned by the global economic outlook.
The metal was buoyed, too, by limited buying on the dips, analysts said.
"What we have positive for gold is that there is a renewed investment demand, so the holdings of the physically pegged products continue to grow," said Julius Baer analyst Carsten Menke.
Holdings of SPDR Gold, the largest gold-based exchange-traded fund, rose 1.5 percent on Friday to 809.76 tonnes.
Gold has risen more than 10 percent since touching 1-1/2-year lows in mid-August, mainly because of tumultuous stock markets and a softer dollar.
Adding to gold's appeal, U.S. Federal Reserve officials have left little doubt that they want to stop raising interest rates, at least for a while.
Higher interest rates tend to reduce appetite for non-yielding gold.
"On a 12-month horizon and then further out, we see more upside once the dollar starts to weaken, as more investment demand comes back into the market, especially after we get clear evidence that the global economy is slowing," Menke added.
On the technical front, "gold remains in a bullish channel on the daily charts", FXTM research analyst Lukman Otunuga said in a note. "An intraday breakout above $1,286 is likely to open a path towards $1,295 and $1,300."
Spot palladium, which hit a record high of $1,434.50 last week on a sustained deficit and rising demand, slipped 1.2 percent to $1,345. It earlier touched $1,331, its lowest since Jan. 16.
Silver rose 0.6 percent to $15.31 an ounce while platinum advanced by 0.8 percent to $797 after touching its lowest since Jan. 2 at $784.
(Reporting by Eileen Soreng in Bengaluru; Editing by Mark Potter and David Goodman)
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