Spot gold reached as high as $1,298.42 an ounce on Friday as investors rush to invest in a “safe-haven” asset before prices eased off the multi-month peak. Gold fell slightly to $1,291.68, a drop of 0.2 percent, at 13:00 GMT but is still on track for a third straight weekly rise. The precious metal has rallied this week as global markets erupted in turmoil, with stocks worldwide in the red over the last couple of days as fears of an economic slowdown intensify. Anxieties over the state of worldwide finances were exacerbated after Apple issued a rare revenue warning, blaming slowing sales in China where the economy has been dented by an ongoing trade war with the United States.
Meanwhile, the US dollar slipped after dismal Chinese manufacturing data showed activity shrank in December for the first time in more than two years.
It comes as China and the United States are set to hold ministerial talks in Beijing next week to seek to end their trade war, which has impaired their economies.
Gold is traditionally considered a safe investment during times of uncertainty.
Sugandha Sachdeva, vice-president of metals, energy and currency research at Religare Broking, told Business Day: “Concerns about tepid global economic growth and volatility in risk assets is likely to keep the safe-haven asset — gold — in favour.”
Craig Erlam, senior market analyst at OANDA, said: “A weaker dollar and low-risk environment are both proving to be very bullish factors for gold but I feel we may have seen some profit-taking as we near the next big round number.
“I don’t see that lasting long though as the risk environment isn’t really improving and the dollar continues to look weak.”
Indicating investor appetite for gold, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose to 795.31 tonnes, their highest since early August, earlier this week.
Silver eased 0.1 percent to $15.72 per ounce.
It had earlier hit $15.87, its highest since mid-July.
Platinum eased 0.2 percent to $796.99 and palladium rose 0.1 percent to $1,265.
Published at Fri, 04 Jan 2019 15:40:00 +0000