Gold firms on sparse trade as economic concerns support

By Karthika Suresh Namboothiri (Reuters) - Gold prices gained on Monday on sparse trade ahead of the holiday season, with lingering concerns about the health of major global economies supporting demand for safe-haven bullion. Spot gold rose 0.4% to $1,483.86 per ounce as of 10:43 a.m.

Reuters December 24, 2019 00:08:38 IST
Gold firms on sparse trade as economic concerns support

Gold firms on sparse trade as economic concerns support

By Karthika Suresh Namboothiri

(Reuters) - Gold prices gained on Monday on sparse trade ahead of the holiday season, with lingering concerns about the health of major global economies supporting demand for safe-haven bullion.

Spot gold rose 0.4% to $1,483.86 per ounce as of 10:43 a.m. ET (1543 GMT). Prices notched $1,485.13 earlier in the session, the highest since Dec. 12.

U.S. gold futures gained 0.5% to $1,487.90 per ounce.

"Investors are looking at political risks in the longer term... There are potential economic risks still in the majority of economies. That's not going to go away in a hurry," said INTL FCStone analyst Rhona O'Connell.

The United States and China have still not signed a 'Phase-1' deal and tensions in the Middle east are contributing to gold's appeal, she added.

U.S. President Donald Trump said on Saturday the United States and China would "very shortly" sign "Phase 1" of a trade agreement.

China said on Monday it would lower tariffs on products ranging from frozen pork and avocado to some types of semiconductors next year.

While the world's two largest economies have exchanged banter about the conditions of the trade deal, there is much room for uncertainty. Any hints of a fall-through in talks could propel gold higher, analysts say.

The 17-month trade war has rocked markets and fanned global recessionary fears.

China's economy is expanding at its weakest rate in nearly 30 years and could face more downward pressure next year. Canada's economy unexpectedly shrank by 0.1% in October, the first monthly decline since February.

Fresh data from the United States provided little respite, with new orders for U.S.-made capital goods barely rising in November and shipments declining, suggesting business investment will probably remain a drag on economic growth in the fourth quarter.

"Despite the upbeat tenor of the overall marketplace, the safe-haven metals are showing keen resilience and even a bit of bullishness as global stock markets rally," Kitco Metals senior analyst Jim Wyckoff said in a note.

The S&P 500 and the Nasdaq hit record highs on Monday.

Palladium was down 0.3% at $1,849.47 an ounce, far from the previous week's record high of $1,998.43. Prices were at the lowest since Nov. 27, owing to a technical correction after a robust rally.

Platinum gained 2.4% to $930.93 an ounce, while silver rose 1.2% to $17.40.

(Reporting by Karthika Suresh Namboothiri in Bengaluru; Editing by Dan Grebler)

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

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