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Bengaluru — Gold prices rose on Tuesday, buoyed by a pullback in the dollar and safe-haven buying due to worries about an economic slowdown, though the gains were capped by prospects of aggressive rate hikes to tame inflation.
Spot gold was up 0.4% at $1,717.09 an ounce at 3.58am GMT, having risen nearly 1% earlier in the session. US gold futures gained 0.4% to $1,729.10. The dollar index was unchanged after touching a 20-year peak in the previous session.
“There has been a bit of a safe-haven buying emanating out of this sort of burgeoning energy crisis in Europe,” said ANZ senior commodity strategist Daniel Hynes. However, “it’s probably going to be a struggle to maintain any upward move considering the hawkish Federal Reserve that we’ve got.”
The eurozone is almost certainly entering a recession, with surveys on Monday showing a deepening cost-of-living crisis and a gloomy outlook that is keeping consumers wary of spending. News that the Nord Stream 1 pipeline, Europe’s major supply route, would remain shut stoked fear of a recession in the region, with consumers hurt by soaring energy prices.
Investors now eye the European Central Bank’s rate action when it meets on Thursday, while a hefty interest rate hike is also expected from the US Federal Reserve’s September 20-21 policy meeting. Even though gold is seen as a hedge against inflation and economic uncertainties, higher US interest rates increase the opportunity cost of holding the non-yielding bullion and boosts the dollar.
Spot gold might retest a resistance at $1,727 an ounce, a break above which could lead to a gain to $1,736, according to Reuters’ technical analyst Wang Tao.
Spot silver rose 0.6% to $18.27 an ounce, platinum was 0.6% higher at $850.73 and palladium gained 0.7% to $2,047.96.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold gains as dollar’s rally pauses
Bengaluru — Gold prices rose on Tuesday, buoyed by a pullback in the dollar and safe-haven buying due to worries about an economic slowdown, though the gains were capped by prospects of aggressive rate hikes to tame inflation.
Spot gold was up 0.4% at $1,717.09 an ounce at 3.58am GMT, having risen nearly 1% earlier in the session. US gold futures gained 0.4% to $1,729.10. The dollar index was unchanged after touching a 20-year peak in the previous session.
“There has been a bit of a safe-haven buying emanating out of this sort of burgeoning energy crisis in Europe,” said ANZ senior commodity strategist Daniel Hynes. However, “it’s probably going to be a struggle to maintain any upward move considering the hawkish Federal Reserve that we’ve got.”
The eurozone is almost certainly entering a recession, with surveys on Monday showing a deepening cost-of-living crisis and a gloomy outlook that is keeping consumers wary of spending. News that the Nord Stream 1 pipeline, Europe’s major supply route, would remain shut stoked fear of a recession in the region, with consumers hurt by soaring energy prices.
Investors now eye the European Central Bank’s rate action when it meets on Thursday, while a hefty interest rate hike is also expected from the US Federal Reserve’s September 20-21 policy meeting. Even though gold is seen as a hedge against inflation and economic uncertainties, higher US interest rates increase the opportunity cost of holding the non-yielding bullion and boosts the dollar.
Spot gold might retest a resistance at $1,727 an ounce, a break above which could lead to a gain to $1,736, according to Reuters’ technical analyst Wang Tao.
Spot silver rose 0.6% to $18.27 an ounce, platinum was 0.6% higher at $850.73 and palladium gained 0.7% to $2,047.96.
Reuters
JSE’s Tuesday opening follows mixed Asian markets
Market data — September 5 2022
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