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Gold prices rise as Fed stance weakens dollar

Reuters  |  BENGALURU 

By Suresh Namboothiri

BENGALURU (Reuters) - Gold prices climbed on Friday as the dollar retreated on expectations the Federal Reserve may pause interest rate hikes if the U.S. economy slows this year, while investors awaited on progress in the Sino-U.S. trade talks.

Spot gold rose 0.6 percent to $1,294.01 per ounce as at 0729 GMT, heading for a fourth straight weekly gain. The is up 0.7 percent so far this week.

U.S. gold futures were up 0.5 percent at $1,294.3 per ounce.

"The weaker dollar and a more dovish Fed are the two most alluring factors for gold," said Stephen Innes, at

"There are concerns for the U.S. economy to slow down, perhaps towards the end of 2019 and into 2020, so the markets are pricing rate cuts."

The dollar slipped against other major currencies, having rebounded on Thursday from three-month lows helped by Federal Reserve Jerome Powell's comment suggesting the central is not done tightening monetary policy just yet.

A partial shutdown extended into its 20th day and provided little comfort to the U.S. currency, after threatened on Thursday to use emergency powers to bypass to pay for a wall on the U.S.-border.

"The (gold) market is holding back a little as they are concerned the equity market could rally significantly on trade war truce," Innes said.

Asian equities inched up to one-month highs, but the rally's momentum slowed partly as investors sought more clarity on whether the and could make headways on their trade talks.

"Dilemma over the U.S.-Sino trade dispute is still raising eyebrows and needs clarity," said Sugandha Sachdeva, vice-- metals, and currency research, Religare Broking Ltd.

"Once trade issues are resolved, the dollar is likely to remain suppressed, losing its appeal as a safe haven...Gold on the other hand would benefit."

Also aiding gold's upward trend are concerns about weakening global growth, further emphasised by sombre data out of and on Thursday.

"Gold will need some fresh to trigger prices to break the $1,300 level bar. $1,299 would be a critical level for further upside with mild resistance at $1,310," said Hareesh V, at Geojit Financial Services.

Spot gold is expected to retest a resistance at $1,299 per ounce, with a good chance of breaking above this level and rising further to $1,311, according to

Palladium climbed 0.2 percent to $1,324.90 per ounce, and was up about 2.5 percent for the week.

Silver rose about rose 1.1 percent to $15.73 per ounce, while platinum was up 0.6 percent to $824.60.

(Reporting by Suresh Namboothiri and in Bengaluru; Editing by and Shreejay Sinha)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Fri, January 11 2019. 13:05 IST