Gold eyes second weekly gain as focus shifts to growth fears

By Arijit Bose (Reuters) - Gold rose on Friday en route to a second weekly gain as the dollar was subdued by weak U.S. economic data and hopes of a breakthrough in the U.S.-China trade dispute, with a darkening global economic outlook bolstering interest in bullion. Spot gold was up 0.5 percent at $1,329.42 per ounce by 1603 GMT, or higher by about 0.6 percent thus far this week

Reuters February 23, 2019 00:06:08 IST
Gold eyes second weekly gain as focus shifts to growth fears

Gold eyes second weekly gain as focus shifts to growth fears

By Arijit Bose

(Reuters) - Gold rose on Friday en route to a second weekly gain as the dollar was subdued by weak U.S. economic data and hopes of a breakthrough in the U.S.-China trade dispute, with a darkening global economic outlook bolstering interest in bullion.

Spot gold was up 0.5 percent at $1,329.42 per ounce by 1603 GMT, or higher by about 0.6 percent thus far this week.

U.S. gold futures were down 0.3 percent at $1,331.70 per ounce.

The metal had fallen about 1 percent on Thursday following the release of minutes from the U.S. Federal Reserve's last policy meeting, which painted a less dovish picture than expected.

"Gold should be doing a little better, because there are possibilities of a trade deal, which would mean the dollar could weaken; the U.S. economy is also slowing quite markedly, that should keep interest rates fairly dormant," INTL FCStone analyst Edward Meir said.

Higher rates reduce investor interest in non-yielding bullion.

The dollar index, though little changed versus six other major currencies on Friday, was set for its biggest weekly fall in a month, bolstering the appeal of gold.

The U.S. currency, which has been a refuge for investors during the U.S.-China trade dispute, has come under pressure on signs of a breakthrough in talks. [USD/]

Also helping the case for gold, new orders for U.S.-made capital goods unexpectedly fell in December, reviving some market expectations that the Fed would halt its 2019 rate-increase cycle.

The news added to concerns about a slowdown in Europe and China, which analysts said have prompted increasing interest in gold, considered a safe haven in times of economic and political uncertainty.

However, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped 0.6 percent to 789.51 tonnes on Thursday.

Natixis analyst Bernard Dahdah said the slight pullback did not signal a shift by gold investors since the levels were still close to highs recorded at the start of 2019.

Elsewhere, palladium gained 1.5 percent to $1,480.17 per ounce, having topped the psychologically significant $1,500 level for the first time on Feb. 20.

The autocatalyst metal was on track for a third straight week of gains, up about 4.2 percent.

Platinum rose 2.2 percent to $837, and was set for its best week since early November 2018. Silver was up 0.7 percent to $15.93, poised to snap two weekly losses.

(Reporting by Arijit Bose; Editing by Steve Orlofsky)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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