- April 10, 2019
- Posted in Africa
Gold prices edged lower on Wednesday, but traded near the previous session’s two-week peak as equities slipped after the International Monetary Fund (IMF) cut its global growth outlook and on trade tensions between the United States and Europe.
Spot gold dipped 0.1 percent to $1,302.56 per ounce as of 0749 GMT, after touching its highest since March 28 at $1,306.09 in the previous session. U.S. gold futures were also down about 0.1 percent at $1,307.60 an ounce.
A slip in Asian equities from eight-month highs has kept bullion underpinned above the key $1,300 level.
“There is some switch from equities to gold after U.S. President Donald Trump voiced his intention to impose tariffs on imports from European Union and the market had some concerns on the economic slowdown which was also reported by the IMF,” said Argonaut Securities analyst Helen Lau.
Trump on Tuesday threatened to impose tariffs on $11 billion worth of European Union (EU) products, opening a new front in his global trade war.
Adding to investor concerns, the International Monetary Fund (IMF) on Tuesday slashed its global economic growth forecasts for 2019 and warned growth could slow further.
Gold is used as a safe investment during times of political and financial uncertainty.
“The yellow metal will continue to be bid as the Brexit drama and trade stories unfold at the same time that major central banks continue their dovish rhetoric,” Alfonso Esparza, senior market analyst at OANDA, said in a note.
Investors now await the release of the Federal Open Market Committee meeting’s minutes from its March meeting and the European Central Bank’s policy decision, both due later in the day.
Lower interest rates reduce the opportunity cost of holding non-yielding gold.
On the technical front, “gold prices will have to hold above the $1,302 mark for a continuation of the bullish trend scenario this week,” Phillip Futures analyst Benjamin Lu said in a note.
Meanwhile, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell for the seventh consecutive session, dropping about 0.4 percent to 757.85 tonnes on Tuesday. The holdings are at their lowest level since November last year.
Among other precious metals, spot platinum slipped about 0.1 percent to $886.40 per ounce. The metal had touched its highest since May 2018 at $914.74 on Monday.
Palladium was about 0.5 percent lower at $1,382.70 per ounce, while silver fell about 0.4 percent to $15.16._Reuters