- October 23, 2018
- Posted by: Trading
- Category: News
* Asian shares down more than 1.5 percent
* Holdings in SPDR Gold Trust rise on Monday
* Palladium dips but holds near Monday’s 9-month peak
(Adds quotes, updates prices)
By Eileen Soreng
BENGALURU, Oct 23 (Reuters) – Gold prices edged higher on Tuesday as Asian stocks faltered, weighed down by political tensions between Saudi Arabia and Western powers, uncertainties around Brexit and Italy’s budgetary woes.
XAU= was up 0.2 percent at $1,223.66 an ounce at 0419 GMT. U.S. GCcv1 rose 0.2 percent to $1,226.5 an ounce.
“Geopolitical tensions are escalating and that has brought some safe-haven buying back into the gold market… Short positions also appear to be unwinding as a result,” ANZ analyst Daniel Hynes said.
Asian shares fell as earnings season nerves in the United States dented Wall Street and the mix of political and economic concerns dampened sentiment. MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.7 percent. MKTS/GLOB
Gold is used as an alternative investment during times of political and financial uncertainty.
The fast pace of short-covering in the past fortnight has helped lift gold prices, with volatility in risk assets, and continued fears over a trade war strengthening demand, according to Jordan Eliseo, chief economist at gold trader ABC Bullion.
“Fears over a slowdown in global growth may also support the metal, especially if markets get a sense that the U.S. Federal Reserve may slow their pace of tightening, with the potential for substantially more short-covering in the weeks ahead,” Eliseo added.
The outlook for global growth in 2019 has dimmed for the first time, according to Reuters polls of economists who said the U.S.-China trade war and tightening financial conditions would trigger the next downturn. yellow metal has declined more than 10 percent from its April peak after investors preferred the dollar as the U.S.-China trade war unfolded against a background of higher U.S. interest rates.
Spot gold looks neutral in a range of $1,217-$1,235 per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao. holdings at the world’s largest gold-backed exchange-traded fund SPDR Gold Trust rose 0.28 percent to 747.88 tonnes on Monday. GOL/ETF
Palladium eased 0.5 percent to $1,116.55 an ounce, after hitting a nine-month high of $1,124.40 in the previous session.
Palladium surged nearly 4 percent on Monday as investors were worried about the impact of any renewed sanctions on Russia, a major producer of the metal, ANZ analysts said in a research note.
“Plans by the U.S. to pull out of a nuclear weapons pact treaty with Russia could ultimately impact palladium sales at a time when the market is extremely tight,” said ANZ analysts. other precious metals, silver was down nearly 1 percent at $14.48 per ounce, while platinum fell 0.1 percent to $819.10 per ounce.
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