Mubasher TV
Contact Us Advertising   العربية

Gold hovers below 6-yr peak on Fed rate cut hopes

Gold hovers below 6-yr peak on Fed rate cut hopes

Mubasher: Gold prices declined on Wednesday, having advanced by more than 1% in the preceding session on worries about the potential threat of a recession, but they hovered close to a more than six-year peak, Reuters reported.

This came amid mounting hopes of a rate cut by the Federal Reserve, and the uncertainties surrounding the trade talks between the US and China, all of which gave a push for the yellow metal.

By 8:51 am GMT, spot gold declined by 0.14% to $1,540.58 per ounce, having traded at $1,554.56 per ounce, its highest level in more than six years, while US gold futures edged down by 0.10% to $1,550.30 per ounce.

Gold gained over 1% on Tuesday as an inversion in the US Treasury yield curve and gloomy economic data re-ignited worries about a looming recession, coupled with trade uncertainties.

“People are beginning to think that the economy is not doing that well, there could be a possible recession, or more likely, a slowing economy, which means the Federal Reserve will have to cut rates and that supports gold,” National Australia Bank (NAB) economist John Sharma was quoted by Reuters.

Moreover, US President Donald Trump on Monday expected a trade deal with Beijing, but sentiment waned after Chinese Foreign Ministry dismissed claims of phone calls between both sides.

However, a strong US dollar capped the gold rally, while Asian stocks recorded meagre gains.

At 8:53 am GMT, the US dollar index, which traces the greenback against a basket of six major peers, rose by 0.14% to 98.14.