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Gold futures jump over 1% on global growth fears

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Forexpros - Gold futures were up for a second day on Tuesday, climbing to a three-day high as a report showing German economic growth nearly stalled during the second quarter added to fears over the global economic outlook and boosted demand for safe haven assets.

On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,779.05 a troy ounce during early European trade, jumping 1.29%.

It earlier rose as much as 1.33% to trade at USD1,779.75 a troy ounce, the highest price since August 11.

Preliminary data released earlier showed that Germany's gross domestic product increased by a seasonally adjusted 0.1% during the second quarter, below expectations for a 0.5% increase.

The previous quarter's figure was revised down to growth of 1.3% from a previously reported 1.5% increase.

Year-on-year, German GDP grew at an annualized rate of 2.7%, after rising at a rate of 4.7% in the previous quarter and below expectations for a 3.1% gain.

Meanwhile, markets were awaiting a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy in Paris later in the day, as the two leaders attempt to ease fears over the euro zone's ongoing debt crisis.

On Monday, German government spokesman Steffen Seibert said the introduction of euro bonds will not be on the agenda when the two leaders meet, while adding that the German government did not expect a major breakthrough.

Gold is considered a refuge from financial risk and a haven against economic and political uncertainty.

Elsewhere on the Comex, silver for September dipped 0.1% to trade at USD39.45 a troy ounce, while copper for September delivery sank 1.55% to trade USD3.970 a pound.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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