October 18, 2018 / 4:42 PM / a month ago

CORRECTED-PRECIOUS-Gold rises as stocks dip, sound technicals bolster appeal (Oct 18)

 (Corrects company name and designation of analyst in 12th
paragraph in Oct. 18 story)
    * Wall Street falls after weak industrial earnings, hawkish
Fed
    * Dollar index rises to one-week high
    * Silver and platinum slip to lowest in a week
    * GRAPHIC-Spot gold vs U.S. dollar: tmsnrt.rs/2J6l0kS

    By Sumita Layek and Arpan Varghese
    Oct 18 (Reuters) - Gold rose on Thursday as renewed weakness
in global stock markets spurred investors to seek refuge in
bullion, which has also been helped by an improved technical
outlook.
    Spot gold        rose 0.3 percent to $1,226.11 per ounce at
2:53 p.m. EDT (1853 GMT). U.S. gold futures         settled up
$2.7, or 0.22 percent, at $1,230.10 an ounce.
    "Renewed weakness in equity markets might trigger additional
buying in gold," said Alexander Zumpfe, a precious metals trader
at Heraeus.
    "Gold continues to look well supported by short-covering and
fresh buying after it recently installed a short-term uptrend.
We continue to see good physical demand on every price dip," he
added.
    U.S. stocks fell on Thursday as weak earnings reports from
industrials raised worries over rising expenses and the impact
of tariffs, adding to concerns of higher borrowing costs after
hawkish commentary in the U.S. Federal Reserve's minutes.
                             
    "Overall, we have been technically breaking above the
previous highs, so it will be difficult for gold prices to move
below that," said ABN AMRO analyst Georgette Boele.
    The global stock market sell-off on Monday boosted gold's
appeal, helping the yellow metal to a 2-/1/2-month peak of
$1,233.26. 
    A rise above the 100-day moving average, around $1,226, was
also supporting gold, with some analysts saying a clear break
above that level could trigger further gains and put further
pressure on short-sellers.
    The dollar index        rose to a one-week high after the
minutes from the last Fed meeting reiterated a hawkish stance on
monetary policy, normally a bearish signal for gold.            
      
    

    "We have seen strong inflows in exchange traded funds (ETF)
in the last weeks that sort of indicate investor sentiment is
turning now for the metal, moving to the positive side," ETF
Securities analyst Nitesh Shah said.
    Holdings of the SPDR Gold Trust      , the largest
gold-backed ETF, have gained more than 2 percent since Oct. 3.
    "Geopolitical and macroeconomic factors are still not
indicating exuberance and risk appetite returning to markets
with full throttle," said Sugandha Sachdeva, vice president of
metals, energy and currency research at Religare Broking Ltd. 
    Trade war concerns, a hawkish U.S. central bank and tensions
between the United States and Saudi Arabia are seen weighing on
appetite for riskier assets. This bodes well for gold as a hedge
against market volatility and a portfolio diversifier, Sachdeva
added.
    In other precious metals trading, silver        was down 0.2
percent at $14.59 per ounce, having earlier touched its lowest
since Oct. 11 at $14.41.
    Platinum        slipped 0.3 percent to $829 after hitting a
one-week low of $821, while palladium        gained 0.3 percent
to $1,072.25.

    
 (Reporting by Sumita Layek, Arpan Varghese and Swati Verma in
Bengaluru; additional reporting by Vijaykumar Vedala; editing by
Edmund Blair and Jonathan Oatis)
  
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