Gold prices rise to more than one-week high as dollar loses ground after weak US economic data

Gold prices rose on Tuesday, trading close to a more than one-week high touched in the previous session, as the dollar eased after weak US economic data. Spot gold rose 0.2 percent to $1,299.59 per ounce, after touching its highest since 28 March at $1,303.61 in the previous session. US gold futures were up 0.1 percent at $1,303.30 an ounce. “The US dollar is subdued and data shows that there is continued buying from central banks,” ANZ analyst Daniel Hynes said. [caption id=“attachment_4295239” align=“alignleft” width=“380”] Representational image. Reuters[/caption] China, the world’s biggest gold consumer, raised its gold reserves by 0.6 percent to 60.62 million ounces by end-March, central bank data showed. Turkey also raised its gold holdings in March, according to data from the International Monetary Fund. The dollar sagged after weak US economic data, making gold cheaper for investors holding other currencies. It posted its biggest daily percentage decline since 20 March in the previous session. Orders for US-made goods fell modestly in February and the manufacturing sector is slowing amid rising inventories, data showed on Monday. US non-farm payrolls data on Friday also signalled a slowdown in wage growth and job cuts in the manufacturing sector even as employment accelerated. “Gold’s gains in the last 24 hours were a follow-up on the jobs report from the US on Friday,” said Ilya Spivak, a senior currency strategist at DailyFX. “Decline in wage inflation takes the pressure off the Fed and lets it remain dovish and delay rate hikes and maybe switch gears, and that’s supportive for gold.” Lower interest rates reduce the opportunity cost of holding the non-yielding bullion and also weigh on the dollar, increasing gold’s appeal. Market participants are now awaiting minutes of the Federal Open Market Committee’s March meeting, due on Wednesday, while the European Central Bank meeting on the same day is also on investors’ radar. “There is an expectation for a dovish-biased statement based on what came out in March. The larger issue is how concerned are our policy makers over the state of global economy,” Spivak said. The US Federal Reserve last month abandoned projections for any interest rate hikes this year amid signs of an economic slowdown. Meanwhile, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell for a sixth straight session to 760.49 tonnes on Monday. Among other precious metals, spot platinum was down 0.1 percent at $904 per ounce, after touching its highest since end-May 2018 in the previous session. Palladium slipped 0.5 percent to $1,376.07 an ounce, while silver gained 0.1 percent to $15.26 per ounce.