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PRECIOUS-Gold rises as global growth fears boost safer assets

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(Updates prices, adds fresh comments and details)

* SPDR gold holdings highest since mid-August

* Investors raise net longs in gold to 6-month high - CFTC

By Swati Verma

BENGALURU, Dec 24 - Gold rose on Monday, trading near lastweek's six-month high, as concerns about a possible U.S.government shutdown and global growth weighed on the dollar andequity markets, boosting the appeal of assets viewed as safer,such as bullion.

Spot gold XAU= was up 0.4 percent at $1,260.64 per ounce,as of 1100 GMT. The metal hit its highest since late June at$1,266.40 on Thursday.

U.S. gold futures GCv1 gained 0.5 percent to $1,264.20 perounce.

Global stocks were set for their seventh straight session oflosses as fears over a U.S. government shutdown, which couldcontinue into January, weighed on risk sentiment at a time whenthe global economy is showing signs of faltering. MKTS/GLOB

"There is growing confidence on gold in 2019," saidActivTrades chief analyst Carlo Alberto De Casa. "Gold isexpected to play a key role in 2019 as a safe haven given thefears of further falls in stock markets and expectation for amore dovish U.S. Federal Reserve."

Fed Chairman Jerome Powell said last week that policymakerswould be "patient" in determining future rate hikes amidexpectations the U.S. economy will slow next year and inflationis likely to stay below the Fed's 2 percent target in 2019.

Fresh economic forecasts showed officials at the median nowsee only two more rate hikes next year compared with the threeprojected in September.

Lower interest rates reduce the opportunity cost of holdingbullion and weigh on the dollar.

The dollar index .DXY was 0.2 lower against a basket ofmajor currencies, making gold cheaper for holders of othercurrencies. USD/

Gold, which is seen as safe investment during political andfinancial uncertainty, has risen about 9 percent from a 19-monthlow of $1,159.96 in mid-August.

"I think gold will try to hold the level of $1,260. Themedium term target seems to be $1,300, while we could expect anintermediate resistance at $1,280-1,285," De Casa said.

Investors' increased interest in gold is underpinned by anincrease in net longs by speculators and a rise in holdings ofSPDR Gold TrustGLD , the world's largest gold-backedexchange-traded fund.

Hedge funds and money managers raised their net longpositions in Comex gold to a six-month high in the week to Dec.18, while SPDR holdings rose to their highest since mid-Auguston Friday. CFTC/GOL/ETF

"We are seeing small physical demand and short-covering ingold," said Peter Fung, head of dealing at Wing Fung PreciousMetals in Hong Kong, adding activity was thin before Christmas.

"We can see support around $1,250. Prices are likely to stayaround the current levels until the end of this year."

Among other metals, palladium XPD= was up 0.1 percent at$1,233.41 per ounce.

Silver XAG= rose 0.5 percent to $14.67, while platinum XPT= gained 0.7 percent to $792.10 per ounce. (Additional reporting by Karthika Suresh Namboothiri inBengaluru; Editing by Mark Potter) ((Swati.Verma@thomsonreuters.com; within U.S. +1 651 848 5832,outside U.S. +91 80 6749 6356/1298 ; Reuters Messaging:swati.verma.thomsonreuters.com@reuters.net))


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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