Mubasher: Gold prices on Friday rose, rebounding from the prior session’s sharp drop, as the dollar declined and growing worries over a global economic slowdown growth boosted appetite for the safe-haven metal.
By 9:03 am GMT, US gold futures rose 0.53% to $1,301.90 per ounce, while spot gold went up 0.43% to $1,301.79 per ounce, after losing around 1% in the prior session.
“As long as gold can hold the $1,290 level, it can reach the first level of $1,302 and then $1,310,” Mumbai-based Kedia Commodities director Ajay Kedia told Thomson Reuters.
The US dollar was on course to record its biggest weekly loss since early December last year.
At 9:07 am GMT, the dollar index, which gauges the greenback against a basket of six major currencies, declined 0.14% to 96.6500.
“The dollar has weakened and gold as a safe-haven asset has seen support from Brexit uncertainty,” Kedia said.
House of Commons on Thursday voted in favour of a delay to the deadline for Brexit, which was slated for 29 March, paving the way for Prime Minister Theresa May to renew efforts to secure the UK parliament’s approval on her transition agreement next week.
In addition, growing signs of a slowdown of global economic growth gave support to bullion, analysts told Reuters.
The Bank of Japan (BOJ) on Friday downgraded its assessment on overseas economies, citing shown signs of slower pace.
Moreover, remarks from China’s Premier about a slowing growth momentum indicate that one of the world’s biggest economies is struggling, giving the yellow metal some push, Singapore-based dealer GoldSliver Central managing director Brian Lan told Reuters.
In the same vein, US figures on Thursday pointed to escalating pressure on the economy.
The count of individuals filling for unemployment benefits hit one-month high last week, while new home sales tumbled last January.
Negative US figures and Brexit as well as the uncertainty around US-China trade talks are shoring up gold prices, Kedia said.
An anticipated summit to conclude a trade agreement between US President Donald Trump and his Chinese counterpart Xi Jinping would not be held this month, until at least by the end of next April.
More progress is needed in the negotiations between both sides, US Treasury Secretary Steven Mnuchin said.