Gold gains as Fed rate cut expectations provide support

By Eileen Soreng (Reuters) - Gold prices climbed to a week's high on Thursday, supported by expectations for an interest rate cut by the U.S. Federal Reserve following soft inflation data, although an uptick in equities capped gains.

Reuters June 14, 2019 01:06:37 IST
Gold gains as Fed rate cut expectations provide support

Gold gains as Fed rate cut expectations provide support

By Eileen Soreng

(Reuters) - Gold prices climbed to a week's high on Thursday, supported by expectations for an interest rate cut by the U.S. Federal Reserve following soft inflation data, although an uptick in equities capped gains.

Spot gold rose 0.5% to $1,340.13 per ounce as of 1:32 p.m. EDT (1732 GMT), after touching its highest since June 7 at $1,344.60 earlier in the session.

U.S. gold futures settled up 0.5% at $1,343.70 an ounce.

"The initial move on higher prices was due to escalating trade tensions ... Thereafter, concerns around recession or a slowing U.S. economy has helped push up rising expectations of a Fed interest rate cut in July," said Suki Cooper, precious metals analyst at Standard Chartered Bank.

Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.

Fed policymakers are scheduled to meet on June 18-19, with financial markets pricing in at least two rate cuts by year-end, after tepid consumer price data on Wednesday and employment data were seen as further indications the U.S. economy may be losing steam.

"It (gold) found strong support around $1,320 earlier this week and has since burst higher with the previous peak around $1,350 in its view. A break of this could propel gold higher, although it will have to be matched with momentum," Craig Erlam, senior market analyst with OANDA, said in a note.

"Risk appetite in the markets is likely to work against gold, but the dollar looking vulnerable is clearly supportive," he wrote.

Wall Street stocks opened higher on Thursday, helped by gains in energy shares after suspected attacks on two tankers off the coast of Iran boosted oil prices.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.5% to 759.70 tonnes on Wednesday from 756.18 tonnes on Tuesday.

Silver climbed 1.1% to $14.90 per ounce while platinum dipped 0.3% to $806.07.

Palladium jumped 2.6% to $1,442.51 per ounce after hitting a more than six-week high of $1,447.26 earlier in the session.

"Even though auto sales globally are slowing, we are seeing palladium demand rise amid tighter emission regulations around the world," said Standard Chartered's Cooper.

(Reporting by Eileen Soreng; additional reporting by Karthika Namboothiri and Diti Pujara in Bengaluru; editing by Dan Grebler and G Crosse)

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

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

India considers emergency authorisation of vaccine as COVID-19 cases surge
World

India considers emergency authorisation of vaccine as COVID-19 cases surge

By Rajendra Jadhav MUMBAI (Reuters) - India said on Sunday it was considering granting an emergency authorisation for a COVID-19 vaccine, particularly for the elderly and people in high-risk workplaces, as the country's number of reported infections passed 4.75 million. India, which has consistently reported over 1,000 COVID-19 deaths daily this month, has now recorded 78,586 fatalities from the disease. It lags only the United States globally in overall number of infections, but it has been adding more daily cases than the United States since mid-August

Would-be Merkel successor Laschet loses ground in local election win
World

Would-be Merkel successor Laschet loses ground in local election win

BERLIN (Reuters) - Germany's Christian Democrats were set for an election win in the western state of North Rhine-Westphalia on Sunday, an exit poll showed, but their share of the vote shrank, denting state premier Armin Laschet's ambitions to succeed Chancellor Angela Merkel. Laschet, who is positioning himself as the continuity candidate to succeed Merkel, had hoped to increase the Christian Democrats' share of the vote in the local elections to boost his standing ahead of a December party leadership showdown

Peru bid to oust president loses steam as opposition splits
World

Peru bid to oust president loses steam as opposition splits

By Marco Aquino LIMA (Reuters) - A bid by the opposition-led Congress to remove Peruvian President Martín Vizcarra appeared to falter on Sunday, after key political leaders rejected the ouster over fears the upheaval would plunge the country into a political crisis. César Acuña, head of the second-largest party in Congress and a possible candidate in 2021 presidential elections, said an ouster would "aggravate" the country's current situation, already fragile from the impact of the coronavirus crisis. Acuña's party had given key votes last Friday to start impeachment proceedings against Vizcarra over leaked audio tapes some lawmakers said showed the president trying to downplay ties to a singer being probed over government contracts