Translate

Search This Blog

Search Tool




Dec 26, 2018

Gold Price at Close Report: Gold hits 6-month peak on global economy worries, US government shutdown

Tom DiChristopher



Reusable: Gold coins
Gold rose to six-month highs on Wednesday as worries a partial U.S. government shutdown added to concerns over slowing global economic growth, driving many investors toward the safe-haven metal even as the dollar rose and U.S. stocks opened higher.
Spot gold rose 0.8 percent to $1,278.70 per ounce and touched its highest since June 18. U.S. gold futures, meanwhile, were up 0.8 percent at $1,281.80 per ounce.
“The big concern for investors is the sell-off we are seeing in equity markets, the comments coming from U.S. President Donald Trump over the Federal Reserve and whether Fed’s independence is going to be under pressure now,” said David Song, an analyst at DailyFX.
U.S. stocks opened higher, but roughly three-fourths of the S&P 500 stocks are trading in bear market territory.
The partial shutdown of the U.S. federal government and President Donald Trump’s criticism of the Federal Reserve have unnerved investors.
The political impasse over the border wall funds and the recent unceremonious departure of the U.S. defense chief have added to investor worries over U.S.-China trade tensions and other geopolitical events, crimping global growth and corporate profit.
Treasury Secretary Steven Mnuchin on Monday held a conference call with U.S. regulators to discuss plunging U.S. stock markets and that has also stoked concerns among investors, Song said.
“We are near-term constructive on gold. There are concerns about global growth in 2019, global geo-political uncertainties and Trump’s continued attack on the Federal Reserve and how long the government shutdown will continue in the U.S.”
Spot gold is up over 4 percent for the month thus far, putting it on track to register its best December in about 10 years.
Interest in gold, which is seen as a hedge against political and economic worries, has reflected in holdings of SPDR Gold, the largest gold exchange-traded fund. SPDR holdings are at their highest point since August and have risen about 6 percent since touching more than 2-1/2-year lows in October.
Gold prices are testing the key resistance at $1,274.60, and breaching this level convincingly will push the price towards $1,286.70 on the near term basis, Mumbai-based Kedia Commodities said in a research note.

Source: CNBC