Gold hits six-month peak on global economy worries, U.S. government shutdown
By Sethuraman N R BENGALURU (Reuters) - Gold rose to six-month highs on Wednesday as investors kept purchasing the precious metal as a safe haven against an uncertain global economy, volatile financial markets, a partial U.S.
By Sethuraman N R
BENGALURU (Reuters) - Gold rose to six-month highs on Wednesday as investors kept purchasing the precious metal as a safe haven against an uncertain global economy, volatile financial markets, a partial U.S. government shutdown and U.S. President Donald Trump's criticism of the Federal Reserve.
Spot gold rose 0.8 percent to $1,278.81 per ounce at 11:26 a.m. EST (1626 GMT). It touched $1,279.06, its highest since June 19 earlier. U.S. gold futures were up 0.8 percent at $1,281.80 per ounce.
"The big concern for investors is the sell-off we are seeing in equity markets, the comments coming from Trump over the Federal Reserve and whether the Fed's independence is going to be under pressure now," said David Song, an analyst at DailyFX.
With investors still worried about the global economy and corporate profits, the U.S. dollar and equities pared early gains. Roughly three-fourths of S&P 500 stocks were in bear market territory.
The partial shutdown of the U.S. federal government over Trump's demand for border wall funding and the president's criticism of the Fed have unnerved investors. Other concerns included the departure of U.S. Defense Secretary James Mattis and U.S.-China trade tensions.
"We are near-term constructive on gold,". Song said. "There are concerns about global growth in 2019, global geo-political uncertainties and Trump's continued attack on the Federal Reserve and how long the government shutdown will continue in the U.S."
Spot gold is up 4.7 percent for the month thus far, on track for its biggest December gain in about 10 years.
Gold is seen as a hedge against political and economic worries. Holdings of SPDR Gold, the largest gold exchange-traded fund, are at their highest point since August and have risen about 6 percent since touching more than 2-1/2-year lows in October.
"Gold is printing day's highs as the U.S. dollar dips with markets continuing to scale a wall of worry," said Tai Wong head of base and precious metals derivatives trading at BMO.
"Gold looks like it's breaking out higher with a short term target of $1,300 and medium term target of $1,360-$1,370. More importantly the algorithmic trading programs which are practically all momentum followers will continue to push gold higher as the trend remains clearly up."
Among other metals, silver gained 2.9 percent to $15.16 per ounce, its highest since Aug. 13.
Platinum was up 2.1 percent at $799.30. Palladium was up 0.2 percent at $1,248.30 per ounce.
(Reporting by Nallur Sethuraman and K. Sathya Narayanan in Bengaluru; Editing by Robin Pomeroy and David Gregorio)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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