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PRECIOUS-Gold hits over 6-month high on falling dollar, equities

Published 2019-01-02, 03:22 a/m
© Reuters.  PRECIOUS-Gold hits over 6-month high on falling dollar, equities
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* Asian stocks dip on weak economic data from China

* Market awaits Fed Chair views, US non-farm data

* Dollar index .DXY hovers near two-month lows

By K. Sathya Narayanan

BENGALURU, Jan 2 (Reuters) - Gold scaled a more than six-month peak on Wednesday as the dollar fell along with Asian equities after disappointing data from China cemented fears of a slowdown in global economic growth.

Spot gold XAU= was up 0.28 percent at $1,285.71 an ounce as of 0816 GMT, after hitting its highest since June 15, 2018 at $1,287.31 earlier in the session.

U.S. gold futures GCv1 rose 0.5 percent to $1,287.80 per ounce.

"It looks very optimistic and fundamentally supportive for gold as the overall mood is still very uncertain and the market confidence is still weak on global growth worries," said Benjamin Lu Jiaxuan, a commodities analyst at Phillip Futures.

The dollar index .DXY , which tracks the greenback against a basket of major currencies, was hovering near a two-month low hit in the previous session. USD/

A softer dollar makes the greenback denominated bullion cheaper for investors holding other currencies.

Also, Asian shares turned tail on the first trading day of the new year as more disappointing economic data from China, the world's second-largest economy, darkened the mood and erased early gains in U.S. stock futures. MKTS/GLOB

The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) for December fell to 49.7 from 50.2 in November, marking the first contraction since May 2017, and followed a raft of soft trade data from the Asian region. global economy has entered into an uncharted territory considering the fact that the Chinese data was worse than expected," said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India.

"With uncertainties on global economy and geopolitical concerns, it's just a matter of time gold is going to shoot up."

Markets were looking for views from Federal Reserve Chairman Jerome Powell on the U.S. economic outlook and hints about rate hikes in 2019 when he participates in a joint discussion with former Fed chairs Janet Yellen and Ben Bernanke on Friday.

Also looming are a closely-watched survey on U.S. manufacturing due on Thursday, followed by the December payrolls report on Friday.

There are expectations that a three-year rate-hiking cycle in the United States has come to a close. Markets currently expect no rate hikes next year.

A halt in interest rate increases would be beneficial for non-interest bearing bullion.

Among other precious metals, palladium XPD= lost 0.77 percent to $1,254.30 per ounce.

Silver XAG= was down 0.13 percent at $15.42 an ounce, while platinum XPT= was flat at $791.40 per ounce.

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