👀 Ones to watch: The MOST undervalued stocks to buy right nowSee Undervalued Stocks

PRECIOUS-Gold gains luster as Fed rate cut bets, trade tensions boost demand

Published 2019-06-06, 02:28 p/m
© Reuters. PRECIOUS-Gold gains luster as Fed rate cut bets, trade tensions boost demand
XAU/USD
-
XAG/USD
-
GC
-
SI
-
PA
-
PL
-
ADP
-

* Gold has risen over $60/oz since last Thursday

* Gold may consolidate after a strong run in a short time -analyst

* Platinum off three-week highs (Updates prices)

By Arijit Bose

June 6 (Reuters) - Gold prices rose on Thursday, as fears about the impact of trade wars on the global economy, and rising expectations for a U.S. interest rate cut enhanced the metal's appeal.

Spot gold XAU= rose 0.7% to $1,338.65 per ounce as of 1:48 p.m. EDT (1748 GMT), while U.S. gold futures GCv1 settled up 0.7% at $1,342.70.

"Ongoing concerns regarding global economic growth is supporting gold at the moment," said David Meger, director of metals trading at High Ridge Futures, adding that U.S. trade tussles with Mexico and China are taking a toll.

"Recent commentary by U.S. Federal Reserve officials that they are at least willing to look at rate cuts if the data warrants has also helped commodities across the board."

Having suspended a three-year monetary tightening campaign earlier this year, the Fed is now widely expected to cut rates.

Chairman Jerome Powell said earlier this week the central bank will closely monitor the economic impact of trade conflicts, a deviation from his former pledge to be "patient" before raising or lowering rates. President Donald Trump, who has consistently advocated rate cuts, on Thursday issued fresh threats to hit China with tariffs on "at least" another $300 billion of Chinese goods. He also said, however, that he thought China and Mexico wanted to make deals. Trump's threat last week to impose tariffs on Mexico, gold has risen more than $63, and is only $11 away from its 2019 high, set in February.

"Gold has run a long way in its rally in a short span of time, so I would not be surprised to see it consolidate," Saxo Bank commodity strategist Ole Hansen said.

The market is eyeing data on U.S. non-farm payrolls due at 1230 GMT on Friday for clues on the trajectory of interest rates.

"Wednesday's ADP (NASDAQ:ADP) national employment report for May showed only 27,000 jobs added in the month. That anemic number has many looking for a weaker number in Friday's jobs report," Jim Wyckoff, senior analyst at Kitco, said in a note. other precious metals, silver XAG= rose 0.8% to $14.91 per ounce, close to a more than one-month high of $15.04 set in the previous session.

Palladium XPD= climbed 1.6% to $1,349.51 an ounce, while platinum XPT= inched down 0.1% to $798.50, away from a near three-week high of $832.63 hit on Wednesday.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.