By Brijesh Patel
(Reuters) - Gold prices rose on Thursday after a nearly 2% slide in the previous session triggered buying interest for the safe-haven metal, although a strengthening U.S. dollar capped gains.
"We are seeing increasing volumes in the exchange-traded funds (ETF) to position gold on yesterday's sell-off. This goes to show that these dips are being bought by investors," said Daniel Ghali, commodity strategist at TD Securities.
Reflecting investors' sentiment in gold, holdings of SPDR Gold Trust
However, denting gold's appeal, the dollar <.DXY> firmed near a three-week peak after political uncertainties in the United States stemming from an impeachment inquiry into President Donald Trump drove investors to the safety of the greenback. [USD/]
A U.S. House Intelligence Committee on Thursday released a declassified version of a whistleblower report alleging that Trump used his office to solicit interference in the 2020 presidential election from a foreign country.
The fresh developments surrounding Trump's July 25 Ukraine call sent U.S. stock indexes and Treasury yields lower, offseting positive trade signals from China.
Earlier in the day, Beijing said it was in close communication with the United States and was preparing to make progress with their trade talks in October.
"The weakening global economic data and political risks should keep stimulus strong from the U.S. Federal Reserve, European Central Bank and People's Bank of China," Edward Moya, a senior market analyst at OANDA, said in a note.
"Once this consolidation period ends, we could see gold target the $1,600 level."
U.S. business investment contracted more sharply than previously estimated in the second quarter and corporate profit growth was tepid, casting a shadow on an economy that is being stalked by financial market fears of a recession.
"We continue to be in the opinion that global growth signals are still weakening and the question is will that sap into the United States and prompt the Fed to cut rates more aggressive than the market currently anticipating," TD Securities' Ghali said.
Gold tends to appreciate on expectations of lower interest rates, which reduce the opportunity cost of holding non-yielding bullion.
On the technical front, spot gold is likely to fall to $1,488 an ounce after breaking support at $1,514, said Reuters technical analyst Wang Tao.
(GRAPHIC: TECH/C - https://fingfx.thomsonreuters.com/gfx/ce/7/6634/6616/Pasted%20Image.jpg)
(Reporting by Brijesh Patel in Bengaluru; Editing by Nick Zieminski and Matthew Lewis)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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.
Updated Date: Sep 27, 2019 02:06:49 IST