Sun, Aug 11, 2019 - Page 14 News List

Gold futures post biggest weekly gain since June


Gold futures on Friday held above US$1,500 an ounce despite a second daily loss, while silver closed near a 14-month high.

Both metals have rallied amid worries about the global economic outlook and as central banks around the world continue to cut interest rates.

The trade spat between the US and China has also increased demand for haven assets, with traders and analysts in Bloomberg’s weekly survey mostly bullish on their outlook for gold.

Gold futures for December delivery settled 0.1 percent lower at US$1,508.35 an ounce on the Comex in New York, paring its gain to 3.5 percent this week, the biggest such increase since June.

Silver futures for September delivery posted a 4.1 percent rise this week.

The metal, which closed at US$16.931 an ounce on Friday, touched US$17.26 an ounce two days earlier. That was the highest price for silver since the middle of June last year.

“The genie is out of the bottle and all the people waiting on the sidelines are rushing to buy,” Adrian Day Asset Management president Adrian Day said. “Clearly, at some point, the stock market will turn around, the US and China could even make a trade agreement, and things will calm down. Then we shall see some profit-taking, but for now, I think gold will continue to rise.”

Further signs of a global economic slowdown were evident on Friday as the UK unexpectedly registered its first economic contraction since the aftermath of the financial crisis.

In the US, a measure of underlying US producer prices last month fell for the first time since early 2017, adding to signs of muted inflation that might reinforce the case for further US Federal Reserve easing.

Investors are continuing to flood into exchange-traded funds (ETFs) backed by gold, with holdings extending gains to the highest since March 2013.

Goldman Sachs Group Inc sees the growth in ETF investment as a key factor behind the bank’s forecast that gold will climb to US$1,600 over the next six months.

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