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Gold rises as weak Chinese trade data revives growth concerns

Reuters  |  BENGALURU 

By Arijit Bose

BENGALURU (Reuters) - Gold prices rose on Monday, with investors seeking safety as equities slipped after weak Chinese trade data dented risk sentiment and rekindled fears of a global economic slowdown.

Spot gold rose 0.5 percent to $1,293.80 an ounce by 1223 GMT while U.S. gold futures gained 0.4 percent to $1,294.50.

"Some of the exuberance we have seen across risky assets in the past couple of weeks seems to have faded as we start a new week. With that, we are once again seeing an underlined demand for gold," said Saxo

The is often used as a hedge against economic and political uncertainty.

Though the market is hopeful of a U.S.-trade deal, softening equities and weak trade data from show the questions remain over whether weaker global economic growth can be arrested, Hansen added.

Chinese exports fell by their most in two years in December, alongside a significant contraction in imports, data showed on Monday. That prompted a deceleration in global stock markets and highlighted fears of a sharper slowdown in global growth. [MKTS/GLOB]

On the technical front, the $1,300 level is "quite a barrier" for gold at the moment, said

Spot gold has gained more than 11 percent since hitting a 1-1/2-year low in mid-August at $1,159.96.

Investors will now be eyeing developments on trade between the and China, with U.S. officials expecting a visit by Beijing's top this month after mid-level discussions between the two countries ended on a seemingly positive note.

"Safe-haven appeal continues to gleam in the current term as investors deliberate on economic uncertainties and heightened geopolitical risks in 2019," analysts said in a note.

Adding to the geopolitical unease is Tuesday's vote on British Theresa May's Brexit deal as well as the partial shutdown over Donald Trump's demand to build a wall along the U.S.-border.

Gold has also been lifted by a dovish indication from Jerome Powell, who last week reaffirmed that the central had the potential to remain patient on monetary policy, downplaying suggestions that interest rates would be raised twice more this year.

Among other precious metals, palladium rose 0.3 percent to $1,322.20 an ounce. It hit a record high at $1,342.43 last week.

dropped 0.9 percent to $803.40 while silver slipped 0.1 percent to $15.59.

(Reporting by Arijit and in Bengaluru; Editing by and David Goodman)

(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: Mon, January 14 2019. 23:53 IST