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PRECIOUS-Gold hits multi-month high as falling equities cement growth fears

Published 2019-01-02, 08:06 a/m
© Reuters.  PRECIOUS-Gold hits multi-month high as falling equities cement growth fears
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* World shares dip on China manufacturing data

* Market awaits Fed pointers, U.S. non-farm payrolls

* Silver hits five-month peak

By Arijit Bose

BENGALURU, Jan 2 (Reuters) - Gold touched its highest in more than six months on Wednesday as sagging equities compounded concerns over weakening global markets, prompting safe-haven flows into the precious metal.

Spot gold XAU= was up 0.2 percent at $1,284.71 an ounce at 1250 GMT, having earlier touched its highest since June 15 at $1,288.66.

U.S. gold futures GCv1 rose 0.5 percent to $1,287.10.

"We are seeing a very risk-averse market right now," said Craig Erlam, senior market analyst at OANDA.

Global shares began 2019 on a downbeat note while oil prices and bond yields slid and the Japanese yen strengthened as data from far and wide exacerbated concern over the potential for a global economic slowdown. and geopolitical concerns mean it is only a matter of time before gold shoots up, said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai.

Markets are also awaiting views from Federal Reserve Chairman Jerome Powell on the U.S. economic outlook and hints about interest rates in 2019 when he participates in a joint discussion on Friday with former Fed heads Janet Yellen and Ben Bernanke.

Further pointers are expected this week from a closely watched survey on U.S. manufacturing, due on Thursday, followed by the December payrolls report on Friday.

"People are also expecting a softer dollar in 2019," OANDA's Erlam said, adding that gold prices could also be supported by a changing outlook for interest rates. are expectations that a three-year rate-hiking cycle in the United States has come to a close, which would be beneficial for non-yielding bullion.

The United States Treasury market fell earlier in the day on assumptions that the Federal Reserve will call a halt to its rate increases. MKTS/GLOB

Among other precious metals, palladium XPD= fell 0.5 percent to $1,257.49 an ounce.

Silver XAG= was steady at $15.44, having earlier touched its highest since Aug. 3 at $15.51, while platinum XPT= fell 0.2 percent to $789.80.

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