ModernGhanalogo

FEATURED: Why Are Black People Obsessed With The Bible That Was Used To Enslave ...

body-container-line-1
25.10.2019 Business & Finance

Gold Hits 2-Week High On Weak U.S. Data

By News Desk
Gold Hits 2-Week High On Weak U.S. Data
OCT 25, 2019 BUSINESS & FINANCE

Gold rose to a two-week high on Friday, holding above the US$1,500 an ounce psychological level, as weak U.S. economic data spurred expectations for another interest rate cut by the Federal Reserve, while palladium scaled a fresh peak.

Spot gold XAU= hit its highest since Oct. 10 at $1,506.76 earlier in the session and was up 0.1% to $1,505.40 per ounce at 0805 GMT. The metal has gained 1.1% this week, heading for its best week in five.

U.S. gold futures GCv1 were up 0.2% at $1,508.20 per ounce.

The metal breached the $1,500 per ounce ceiling for the first time in more than six years on Aug. 7.

New orders for key U.S.-made capital goods fell more than expected in September and shipments also declined, a sign that business investment remains soft amid the fallout from the U.S.-China trade war, data showed on Thursday.

The Fed has cut interest rates twice this year and investors see another cut on the cards as the economy struggles with the headwinds from the trade war and slowing global growth.

“Gold still has a number of geopolitical uncertainties and a high chance of a Fed rate cut at the end of this month to get support from, but considering the Sino-U.S. trade tensions are easing, any fresh positive development will weigh on prices,” said Argonaut Securities analyst Helen Lau.

Gold is considered a safer investment during times of political and financial uncertainty.

In Europe, Prime Minister Boris Johnson called for a general election on Dec. 12 to break Britain’s Brexit impasse, conceding he will not meet his “do or die” deadline to leave the European Union next week.

Asian shares inched higher, tracking small gains in global markets, as positive earnings helped offset economic growth concerns, while sterling weakened as the prospect of a British election added fresh uncertainty to Brexit.

“In the near term, we see three triggers for gold, the trade spat, Brexit and the Fed’s interest rate cut,” said Jigar Trivedi, a commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers.

“Any news on these triggers will lead to the breach of the $1,485-$1,510 technical level.”

Elsewhere, palladium XPD= was flat at $1,778.39 an ounce, having earlier hit an all-time high of $1,785.50.

Concerns over a supply crunch for the autocatalyst metal have helped lift prices by more than 41% this year, despite a weakening auto sector.

---Reuters

body-container-line