Gold gains on global growth woes; palladium sets record on supply concerns
By Brijesh Patel (Reuters) - Gold rose to a more than one-week high on Monday as weaker-than-expected economic data from Europe heightened fears of a slowdown in global growth, while palladium continued its record run driven by short supply of the auto-catalyst metal.
By Brijesh Patel
(Reuters) - Gold rose to a more than one-week high on Monday as weaker-than-expected economic data from Europe heightened fears of a slowdown in global growth, while palladium continued its record run driven by short supply of the auto-catalyst metal.
Spot gold was up 0.2% at $1,519.13 per ounce as of 1254 GMT, after hitting its highest since Sept. 12.
U.S. gold futures rose 0.7% to $1,526.30 an ounce.
"We have to acknowledge that these global growth worries are still there ... the German data and data from Europe were weaker than expected. So ... we're seeing fundamental support for gold," Julius Baer analyst Carsten Menke said.
Gold is likely to trade higher near term with more monetary easing by the world's central banks and trade issues between the United States and China still on the table, he added.
German private sector activity shrank for the first time in 6-1/2 years in September, while euro zone business growth stalled this month, a survey showed.
The weaker-than-expected economic readings added to investor worries over the effect of the U.S.-China trade dispute on the world economy, denting appetite for riskier assets.
Over the weekend, the U.S. Trade Representative's office issued a statement characterising two days of talks with China as "productive".
This comes after Chinese officials unexpectedly cancelled a visit to U.S. farms following their negotiations in Washington.
Adding to global geopolitical risks, tensions remained elevated in the Middle East after Washington ordered more troops to the Gulf region to strengthen Saudi Arabia's air and missile defences, following an attack on the kingdom's oil facilities.
Meanwhile, palladium surged to a all-time high of $1,664.50 an ounce.
"There seems to be a shortage of material ... the forwards are tightening as well and there is good demand that cannot be met at the movement," said Afshin Nabavi, senior vice president at precious metals trader MKS SA.
Palladium has risen more than 8% or about $125 so far this month.
"Healthy demand, constrained supply and challenging liquidity conditions are likely driving prices higher," UBS strategist Joni Teves wrote in a note.
She added that a breakdown in U.S.-China trade talks, a deterioration in economic data and a pullback in equities from recent highs presented downside risks for palladium over the remainder of the year.
Silver gained 2.3% to $18.39 per ounce and platinum jumped nearly 1.2% to $956.64.
(Reporting by Brijesh Patel in Bengaluru; Editing by Susan Fenton and David Evans)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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