Picture: 123RF/REALROCKING
Picture: 123RF/REALROCKING

Bengaluru — Gold prices scaled a more than six-month peak on Thursday as worry about a global economic slowdown and volatility in equities boosted safe-haven buying, while a weaker dollar offered support.

Spot gold touched its highest since June 15 at $1,290.09, and was trading up 0.3% at $1,288.43/oz at 4.43am GMT.

US gold futures were up about 0.5% at $1,290.20/oz.

“The weaker dollar lent some support for gold. People are more interested in gold as the stock markets are under pressure and are looking at gold as a safe haven,” said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.

The dollar index fell as much as 0.3%. The Japanese yen, also seen as a preferred asset during times of economic volatility, surged versus the dollar on Thursday.

A softer dollar makes US dollar-denominated bullion cheaper for investors holding other currencies.

Asian markets recouped losses on Thursday, while US stock futures declined after a rare revenue warning from index heavy-weight Apple added to worry about slowing global growth.

Adding to investor concerns, a meeting between US congressional leaders and President Donald Trump on Wednesday saw no sign of an agreement to end a partial government shutdown, now in its 12th day.

Meanwhile, businesses in Britain’s dominant services sector reported the slowest sales growth in two years during the final three months of 2018, another sign of a dampening economic growth ahead of Brexit.

Markets will also be looking for clues about interest rate hikes from a joint discussion between Federal Reserve chair Jerome Powell and former Fed chairs Janet Yellen and Ben Bernanke on Friday.

Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding nonyielding bullion.

Fung said that “$1,280 is a good support level. I expect gold to trade on the upside, hit $1,300 very soon and go on to $1,350 or maybe even $1,400 this year.”

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.97% to 795.31 tons on Wednesday from 787.67 tons on Monday.

Among other precious metals, Silver was up 0.4% at $15.57/oz.

palladium gained 0.7% to $1,263.60/oz, while platinum was down 0.1% at $793.40/oz.

Reuters