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Gold rises on dollar weakness, pause in stocks rally


By N R

(Reuters) - Gold prices rose for a second day on Thursday, extending the gains in the previous session when prices climbed to the highest since September, as dollar weakness and a flagging rally in equities enticed investors to buy the

Spot gold was up 0.2 percent at $1,318.98 an ounce by 0242 GMT. Prices rose to as high as $1,326.56 an ounce on Wednesday, the most since Sept. 15.

U. S. gold futures were little changed at $1,319.10 an ounce.

Gold prices on Wednesday rose over 1 percent as the dollar swooned after a report that Chinese officials had recommended slowing or halting purchases of securities.

Officials reviewing China's foreign-exchange holdings have recommended slowing or halting purchases of U. S. Treasuries, reported on Wednesday, citing people familiar with the matter.


fell to its lowest since November against the Japanese yen and weakened against a basket of major currencies on Wednesday after the report. It fell 0.1 percent to 92.29 on Thursday.

"Rising and strong growth suggest gold will remain supported as investors look for inflation protection," said Stephen Innes, of trading at

"Also, a highly anticipated stock market correction is providing support on dips which continues to support the bullish gold narrative."

held near three-year highs on Thursday, supported by a surprise drop in U. S. production and lower crude inventories.

The rally that has started this year in Asian shares paused on Thursday as concerns about the U. S. administration's protectionist stance hit Wall Street while U. S. bonds were dented by the speculation that may curtail buying.

"Gold could test $1,327 in the short term and above which $1,362 will be opened ... equities are running at high level of exuberance, confidence and valuation extreme which in short stands for bubble," said Amit Kumar Gupta, portfolio management services head at

"The belief "this time it is different" is all set to get a rude shock."

Spot gold looks neutral in a range of $1,311-$1,329 per ounce, and an escape could suggest a direction, according to

Meanwhile, the holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.35 percent to 828.96 tonnes on Wednesday from Tuesday. Holdings fell for a second straight day on Wednesday. [GOL/ETF]

Among other metals, spot silver rose 0.4 percent to $17.01 an ounce. Prices fell to the lowest in nearly two weeks at $16.86 on Wednesday.

rose 0.2 percent to $973.10 an ounce, after touching the highest in nearly four months of $974 in the prior session.

Palladium rose 0.5 percent to $1,088 an ounce, after seeing its worst one-day fall in over a month on Wednesday. Palladium, which rose to a record of $1,111.40 on Tuesday, fell 1.5 percent in the previous session.

(Reporting by in Bengaluru; Editing by and Christian Schmollinger)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, January 11 2018. 09:35 IST