October 23, 2018 / 5:24 PM / a month ago

PRECIOUS-Gold jumps as stocks dip; palladium hits all-time high

    * Gold hits highest since July 17
    * Palladium hits record high
    * EU executive rejects Italian 2019 draft budget 

 (Updates prices, adds comment)
    By Swati Verma
    Oct 23 (Reuters) - Gold rose 1 percent on Tuesday to its
highest level in over three months as the dollar weakened and
global stock markets tumbled, with rising political and economic
uncertainties adding to bullion's appeal.
    Palladium soared to a record high, bringing the precious
metal to within striking distance of achieving parity with gold
and with additional support from expected renewed demand from
China's automotive sector.             
    Spot gold        was up 1 percent at $1,233.21 an ounce at
1:47 p.m. EDT (1747 GMT), having earlier touched its highest
since July 17 at $1,239.68.
    U.S. gold futures         rose 0.9 percent to $1,236.10,
also helped by positive currency fundamentals as the dollar
       turned lower.       
    "It's the selloff in the stock markets today and a weaker
dollar which is helping gold prices," said INTL FC Stone analyst
Edward Meir.
    "The main thing to watch on gold is the turbulence in the
equity markets, especially if it is sustained. If you get
continued declines like this, gold should pick up," Meir said,
adding $1,260 is the next resistance level on the charts.
    Wall Street followed a slide in European and Asian stock
markets, pressured by disappointing corporate earnings, Saudi
Arabia's diplomatic crisis and a dispute over Italy's finances.
           
    The European Commission rejected Italy's draft 2019 budget
on Tuesday, saying it brazenly broke EU rules on public
spending, and asked Rome to submit a new one within three weeks
or face disciplinary action.             
    "The outlook for gold is quite constructive with the metal
quite resilient even with a strong dollar," said Tai Wong, head
of precious and base metals trading at BMO. "I just don't see
anything serious to sell gold here."
    Gold prices have gained more than 6 percent after falling in
mid-August to $1,159.96 an ounce - their lowest since January
2017.
    "We have a whole series of situations in connection with
Saudi Arabia and Russia, and trade tensions between U.S. and
China, and that has been having a knockdown impact on equities
and, in turn, providing support to gold prices," said Capital
Economics analyst Ross Strachan.
    Holdings at SPDR Gold Trust      , the world's largest
gold-backed, exchange-traded fund, rose 0.3 percent on Monday to
747.88 tonnes.          
    Investors consider gold a safe store of value during times
of economic and political uncertainty.
    Meanwhile, palladium        was up 1.8 percent at $1,141.49
an ounce after hitting a record $1,150.50 an ounce - about $100
away from parity with the price of gold.
    Used mainly in emissions-reducing autocatalysts for
vehicles, palladium has gained some 7 percent so far this year.
A combination of factors, from tight supplies and large deficits
to resurgent interest from speculative investors, has kept the
metal on the boil.
    Among other precious metals, silver        rose 0.8 percent
to $14.72, while platinum        was up 1.6 percent at $832.80.

 (Reporting by Swati Verma and Arpan Varghese and Nallur
Sethuraman in Bengaluru; editing by David Gregorio and G Crosse)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below