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PRECIOUS-Gold lifted by signs of ailing global economy


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(Updates prices)

* Gold climbs in sterling and euro terms

* SPDR Gold holdings highest since August 2018

By Arijit Bose

BENGALURU, Jan 3 (Reuters) - Gold prices scaled a more thansix-month peak on Thursday as fears of a global economicslowdown embellished safe-haven demand for bullion, with aweaker dollar adding further support.

Spot gold XAU= was up 0.3 percent at $1,288.49 an ounce at1237 GMT, having touched its highest since June 15 at $1,292.32.

U.S. gold futures GCv1 traded up 0.5 percent at $1,290.40.

"Fears of an economic slowdown are one source of the equitymarket volatility, thus contributing to the covering of shortpositions in the futures market and investors' renewed interestin gold," said Julius Baer analyst Carsten Menke.

European and Asian bourses were dealt a heavy blow as AppleInc AAPL.O announced its first revenue guidance contraction in12 years. MKTS/GLOB

The news from the technology giant also weighed on thedollar index .DXY , which slipped by about 0.2 percent.Weakness in the currency reflects concerns over the U.S. economyand a drastic shift in investor expectations for interest raterises, with many now expecting and end to the U.S. FederalReserve's rate-raising cycle. FRX/

A weaker dollar makes gold cheaper for holders of othercurrencies.

Markets will be looking for clues on U.S. interest ratesafter Federal Reserve Chair Jerome Powell meets former Fedchairs Janet Yellen and Ben Bernanke on Friday.

Gold is highly sensitive to rising interest rates, whichlift the opportunity cost of holding non-yielding bullion.

The market is also awaiting a closely watched survey on U.S.manufacturing due on Thursday, followed by a December payrollsreport on Friday.

Meanwhile, businesses in Britain's dominant services sectorsreported the slowest sales growth in two years during the finalthree months of 2018, indicating a slowing economy ahead ofBrexit. urn:newsml:reuters.com:*:nL8N1Z221P

Gold also hit multi-month highs in euro and sterling terms.Gold denominated in sterling XAUGBP=R peaked at 1,031.89pounds during the day, its highest since Sept. 8, 2017, while XAUEUR=R it peaked at 1,137.47 euros, the highest since June9, 2017.

"Volatile global markets always add to the charm of buyinggold," said Amit Kumar Gupta, portfolio management services headat Adroit Financial Services in New Delhi.

"There is also a major tailwind for gold early in the year,due to buying ahead of Lunar New Year holidays in much of theworld."

Holdings of SPDR Gold TrustGLD , the world's largestgold-backed exchange-traded fund, rose to 795.31 tonnes, theirhighest since early August, indicating investor appetite for theprecious metal. GOL/ETF

Among other precious metals, palladium XPD= gained 0.3percent to $1,258.40 an ounce while silver XAG= was up 0.3percent at $15.56 and platinum XPT= shed 0.4 percent to$791.30. (Reporting by Arijit Bose and Nallur SethuramanEditing by Dale Hudson and David Goodman) ((Arijit.Bose@thomsonreuters.com; Within U.S. +1 651 848 5832,Outside U.S. +91 8067495254; Reuters Messaging:Arijit.Bose.thomsonreuters.com@reuters.net))





This article appears in: Stocks , World Markets , Politics
Referenced Symbols: AAPL ,



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