Gold edges higher as data awakens worry of economic slowdown
European Central Bank president calls for euro-area-wide stimulus as World Trade Organization cuts forecast for growth in global trade in 2019 by more than half
Gold prices inched up on Wednesday, after rising as much as 1% in the previous session, as dismal US manufacturing data fanned fears of a sharp global economic slowdown and stoked bets of further interest rate cuts.
Spot gold was up 0.1% at $1,479.43/oz, as of 1.21am GMT. Prices hit a near two-month low of $1,458.50/oz on Tuesday, before climbing as much as 1% during the session.
US gold futures were down 0.2% at $1,485.4/oz.
US manufacturing activity tumbled to a more than 10-year low in September as lingering trade tensions weighed on exports, further heightening financial market fears of a sharp slowdown in economic growth in the third quarter.
Against a basket of currencies the dollar was slightly weaker, while global shares retreated to one-month lows on Wednesday.
US President Donald Trump once again lashed out at the Federal Reserve on Tuesday, in the wake of the weak manufacturing sector data, saying the central bank has kept interest rates “too high” and that a strong dollar is hurting US factories.
The Fed has set monetary policy to where it can deliver on its 2% inflation goal and there is scope to raise rates slightly over the next few years if the economy continues to grow, Chicago Fed president Charles Evans said on Tuesday.
Manufacturing activity in the eurozone contracted at its steepest rate in almost seven years in September, according to a survey on Tuesday that suggested there would not be a turnaround any time soon.
European Central Bank president Mario Draghi called on Tuesday for euro-area-wide fiscal stimulus aimed at boosting investment, saying the latest steps in this direction are insufficient.
The World Trade Organization cut its forecast for growth in global trade this year by more than half on Tuesday and said further rounds of tariffs and retaliation, a slowing economy and a disorderly Brexit could squeeze it even more.
Prime Minister Boris Johnson will on Wednesday unveil his final Brexit offer to the EU and make clear that if Brussels does not engage with the proposal, Britain will not negotiate further and will leave on October 31.
Gold production in Russia rose 10.5% in the first six months of 2019 to 135.33 tons from 122.50 tons in the same period a year earlier, Russia’s finance ministry said on Tuesday.