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Gold hits past 6M peak on growth jitters, volatile equities

Gold hits past 6M peak on growth jitters, volatile equities

Mubasher: Gold prices on Thursday rose to more than six-month high, as weaker dollar offered support, while safe-haven appetite was boosted by concerns over global economic slowdown and volatile equities.

By 8:55 am GMT, US gold futures climbed 0.60% to $1,291.80 per ounce, while spot gold rose 0.33% to $1,288.89 per ounce, after hitting earlier 1,292.01 per ounce, its highest level since 15 June.

“The weaker dollar lent some support for gold,” Hong Kong-based Wing Fung Precious Metals dealing head Peter Fung told Thomson Reuters.

The US dollar index, which traces the greenback against a basket of six rivals, fell 0.30% to 96.5250.

A weaker dollar renders the greenback denominated metal cheaper for investors holding other currencies.

The Japanese yen (JPY), a preferred currency during times of economic volatility, jumped against the greenback on Thursday.

“People are more interested in gold as the stock markets are under pressure and are looking at gold as a safe haven,” Fung said.

Asian equities wobbled on Thursday, as US stock futures retreated after a rare revenue warning from Apple fuelled worries about global economic slowdown.

In the same vein, a meeting between US congressional leaders and President Donald Trump on Wednesday indicated no consensus to end a partial government shutdown, stoking further investor concerns.

Markets will look for cues about interest rate hikes this year in a joint discussion between the Federal Reserve chair Jerome Powell and former heads Janet Yellen and Ben Bernanke on Friday.

Rate hikes highly impact the precious metal, as they lift the opportunity cost of holding non-yielding bullion.

Markets are also anticipating a survey on US manufacturing activity due later in the day, and non-farm payrolls report to be released on Friday.

Elsewhere, the Australian dollar-denominated gold reached a record high on Thursday at 1,894.02 Australian dollars (AUD) per ounce ($1,320.32), after the currency fell to its lowest level since 2009 in early Asian trade.

Investors looked for a safe-haven due to extreme swings in the Australian dollar, often considered an indicator of global risk appetite.

“Australian producers were slow to realise the move but have since been seen consistently selling, taking advantage of the very bullish move,” MKS PAMP Group traders said in a note.