Gold Futures Settle Notably Higher On Safe-ha…

October 17, 2019

Gold prices rose on Wednesday as traders shunned riskier assets and sought the safe-haven asset amid renewed uncertainty about Brexit and U.S.-China trade deal, and weak retail sales data.

Gold’s uptick was also supported by the dollar, which eased amid speculation the Federal Reserve will likely announce another reduction in interest rate soon to support economic expansion.

A downward revision in its global growth forecast by the International Monetary Fund too prompted investors to seek the safe haven asset.

The dollar index eased to 97.90, losing nearly 0.4%.

Gold futures for December ended up $10.50, or about 0.7%, at $1,494.00 an ounce.

On Tuesday, gold futures for December ended down $14.10, or about 0.9%, at $1,483.50 an ounce, the lowest settlement since September 30.

Silver futures for December ended up $0.043, at $17,427 an ounce, while Copper futures for December settled at $2.5895 per pound, down $0.0245 from previous close.

On Tuesday, the International Monetary Fund cut its forecast for growth in both 2019 and 2020, reflecting increased pessimism about the global economy.

“With central banks having to spend limited ammunition to offset policy mistakes, they may have little left when the economy is in a tougher spot,” said Gita Gopinath, the IMF’s Chief Economist, in the half-yearly World Economic Outlook foreword.

In Brexit news, reports in British media cited EU diplomats as claiming talks had stalled over a future trade deal and fair competition clauses.

On the U.S.-China trade front, a report in Wall Street Journal noted questions remain about how much U.S. agricultural products China intends to buy and the time frame for the purchases, while a Bloomberg report said China wants tariffs rolled back before it moves forward.

According to the data released by the Commerce Department, retail sales in the U.S. unexpectedly decreased in the month of September, falling by 0.3%, after climbing by an upwardly revised 0.6% in August.

The drop came as a surprise to economists, who had expected sales to rise by 0.3% compared to the 0.4% increase originally reported for the previous month.

Another report from the Commerce Department said business inventories in the U.S. came in virtually unchanged in August after climbing by a revised 0.3% in July. Economists had expected inventories to rise by 0.2% compared to the 0.4% increase originally reported for the previous month.


Article Categories:
Forex News

Leave a Reply

Your email address will not be published. Required fields are marked *