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Gold rises on ECB’s stimulus; improving risk appetite limits gains

Gold rises on ECB’s stimulus; improving risk appetite limits gains

Mubasher: Gold prices rose on Friday as monetary easing uncertainties among major central banks boosted demand for the yellow metal, according to Reuters.

However, optimism on trade talks between the US and China lent support to other assets, keeping a lid on gold gians.

By 9:44 am GMT, spot gold climbed by 0.45% to $1,505.96 per ounce, while US gold futures rose by 0.41% to $1,513.60 per ounce.

An aggressive stimulus action by the European Central Bank (ECB), as well as its head Mario Draghi’s pledge of indefinite stimulus, while raising the pressure on the US Federal Reserve and the Bank of Japan (BoJ) to relax their monetary policy next week to support global economy, amid its sluggish growth as heightened threats of protectionism to free trade.

Lower interest rates usually pushes gold prices higher, by reducing the opportunity costs of holding non-yielding bullion and weighing on the US dollar.

Meanwhile, US President Donald Trump on Thursday hinted that he would consider an interim deal with Beijing, despite he prefers a full trade agreement.

Asian equities rallied on President Trump’s remarks in Friday trade.

“De-escalation of the tensions between the world’s two largest economies have led investors to take out money from the safe haven asset gold and move towards risk assets,” Reuters quoted Sugandha Sachdeva, vice-president, metals, energy and currency research at Religare Broking as saying.